Uranium Conference - October 6 - 11am ET

[Music] [Music] hi thank you for joining us today spot uranium is up over 40 on the year making it one of the best performing commodities globally so we thought it would be a good time to put together a uranium conference focused on industry experts producers developers and also explore coasts canada is the second largest producer of uranium in the world and it also produces some of the highest grades found anywhere in the world and it's all found in the province of saskatchewan in a region known as the athabasca basin and you're going to be hearing a lot about the basin from our various presenters throughout these presentations today so let's go through the presenters the conference begins with our first industry expert alisa cochrane of coperneck global investors kopernick is an asset manager based in tampa florida and manages over six billion dollars in assets a portion of which is allocated toward uranium stocks alisa is going to take us through why they are bullish on this sector where they see the uranium price going and also how they value uranium stocks our first company presenter is david cates of denison mines denison is an advanced developer focused on the eastern portion of the athabasca basin with its flagship property wheeler river which is comprised of two projects which are moving through the feasibility process and together have 109 million pounds of uranium denison also has a portfolio of exploration projects as well as a partial interest in the mclean lake mill up next is ross mcelroy of fission uranium vision is a developer focused on the southwestern portion of the athabasca basin vision's flagship asset is a triple r deposit which has a pre-feasibility completed and fission is currently pursuing a feasibility study which will be completed later in 2022 the triple r deposit has 102 million pounds of uranium in the indicated category then we will hear from tim gebrex ceo of iso energy iso energy is focused on the eastern portion of the athabasca basin and is one of the most active exploration companies in the basin and is currently undergoing an aggressive drilling campaign with two rigs focused on its hurricane deposit iso energy has a total of 24 projects and tim will highlight which ones he and his team are focusing on up next is lee currier ceo of next gen energy nextgen is an advanced developer focused on the southwestern area of the basin nextgen has 209 million pounds of uranium and completed a feasibility study on the rook one project earlier this year and we will review the results of that feasibility study with lee nextgen also owns a large portfolio of exploration properties through its 51 percent interest in iso energy then we will hear from john chimpaglia ceo of sprott asset management john and his team oversee the management of the sprott uranium physical trust product and john is going to provide a first-hand look at how the product works and where he sees the uranium price going then we will hear from asgar baderbayev the chief commercial officer of kazatta prom kazadapram is based in kazakhstan and is the world's largest uranium producer nascar is going to provide us with an overview of quezada prom's operations its production profile and where they see the uranium price going if you have any questions for any of our presenters feel free to send us an email to info at bloorstreetcapital.com where you can write your question in the open chat on the right hand side of the screen make sure you subscribe to the channel bloor street capital and also hit the notification button so you'll be kept up to date on future events i hope you enjoy the conference [Music] so [Music] [Applause] hi elise and thank you for joining us today it's good to see you again thank you for having me it's great to see you how are things in tampa blue skies and sunshine yes it's finally starting to cool off so so florida is starting to be a livable place again it's been a hot summer elise before we begin i want to provide a quick overview on where i want to take this discussion and first i want to touch on kopernick and examine your investment style and then i want to move on to uranium and find out exactly how it fits into your investment style i also want to touch on how you value uranium equities and then i just want to conclude on where you and your team think the long-term price of uranium is going so why don't we just begin with an overview of kopernick yeah absolutely um copernic was founded in 2013 we are a global value investment fund so we invest in all caps all sectors all countries value being the prerequisite we will never over pay knowingly for a business so our job is to look across the globe and find businesses value those businesses and then wait for the market to be extremely irrational or emotional and we can take advantage of those opportunities so today we are finding a lot of value in emerging markets as well as as commodities such as such as uranium and what is your aum we are managing about seven billion dollars now so we are very happy with that that's that's another thing is that we are we are capacity constrained um we do not want to be become a big investment firm where these small opportunities such as uranium don't do not move the needle anymore um we're also long-term investors and then we really pride ourselves on the ability to take on career risk own these uncomfortable positions to lower the investment risk for our clients so mining stocks production company stocks these are extremely volatile uh companies which you can you can see in the in the last uh couple of months we've we've fortunately had upside volatility in in the uranium companies but for a very long time we had to be very patient we've owned uranium mining companies since 2013. for a long time all they seemed to do was let's go down so um we're happy to see that the thesis is finally starting to be recognized in in the market um but but this was a this was a painful investment for for many years and and many companies and many uh firms will not be that patient elisa you mentioned that you're a value investor and you go where you see value what sectors do you see value in right now there are across a lot of sectors we see a lot of value however most of that is in emerging markets as you know well the u.s markets are extremely expensive it's very hard to find value in the us so emerging markets make up close to 40 percent of our investment fund commodities extraction businesses are also areas that people don't really want to touch so 45 percent of our our fund is invested in these sorts of production companies gold mining is close to 25 percent uh uranium is nine percent of our fund and then the remainder is in natural gas and oil elisa that's a great overview of kopernick and your investment philosophy now let's discuss how uranium fits into that philosophy why are you so bullish on uranium so the uranium we're bullish on it because we believe it's underpriced uranium today is around forty dollars a pound we believe and across all commodities we invest after figuring out what they they're worth from an incentive price now the incentive price is the price that incentivizes enough supply to to balance future demand so from our standpoint based on the cost curve based on our our talks with management teams the incentive price for uranium is closer to 70 to 90 a pound now that that range is wide but that's because the supply curve becomes very steep at the the far right of the of the curve um so from our standpoint uranium is still underpriced you're not seeing new mines being built you're not seeing acquisitions management teams tend to to be very pro cyclical um and you're not seeing new supply that was cut during the bear market being brought on yet so we still think that there's room to run with with uranium on the demand side it's also very positive new governments are starting to recognize that uranium is a zero carbon very low cost good base load power supply um and so the the attitude around nuclear power is is uh improving as well so we see a lot of nuclear power plants being built in in emerging markets some of the the power plants in developing markets are which were were supposed to be shut down or now you're seeing uh governments decide that maybe we want to extend these the the cost of just extending the life of a nuclear power plant is much cheaper than buying um so the demand side looks good obviously the bear case to the demand side would be if there was another fukushima or something that that happens but um but at this point those risks are more than than priced into both the uranium price as well as the the mining companies alisa you mentioned that your aum is approximately seven billion dollars nine percent of that is allocated toward uranium stocks how many uranium stocks do you do you own and are you focused on the large caps or will you also go down cap as i mentioned we we invest in all caps so we have a couple of production companies we have two a couple companies that just hold uranium as well as some explorers that are sitting on uranium deposits but haven't yet mined that yet and do you have a preference for producers over developers or developers over explore coasts or breast price is paramount so we size our positions based on a the market cap we can't have obviously a huge position in the smaller company but um but we also size based on the upside that we see risk adjusted so from our standpoint the the holding company is is less risky than the producing company which is less risky than the company that is sitting on uranium but we haven't seen the capital being spent get there yet and there's all sorts of risks that go along with that so we value all of the pounds the same we say the holding companies those those pounds have been out of the ground so that's valued at our incentive price the production companies have uranium in the ground which the the market is giving a huge discount between pounds above ground and pounds below ground we think that discount is too large and then they're discounting even further the the explorer companies uh so we say all companies a mining company at least all those pounds are worth roughly thirty dollars a pound but we will heavily risk adjust the the companies in kazakhstan or the companies that haven't built a mine uh there's so many different risks that can uh go wrong with with a mining company and so we wait for the market to be extremely inefficient before we invest in a mining company spot uranium has gone from thirty dollars to as high as fifty dollars in the last few weeks are you still bullish given this move in the spot price absolutely we obviously less bullish than we were when uranium was 20. that was just an unbelievable opportunity now at 40 we still see upside relative to the incentive price uh macarthur still has not come online there's there's the the largest highest grade mine in the world that is that is sitting idle uh we think that you know hopefully we'll see when it when they bring that back on that that's an indication of of getting closer to the incentive price we still have not seen companies acquire each other and that is something that you see in the bull bull markets there are a lot of uranium pounds that are sitting idle in africa those have not been brought on so once we start seeing those sorts of of actions then you know that you're getting closer to the incentive price an example is and and then oftentimes the the commodities will overshoot for example in in the early 2000s you had uranium go from 20 to 137 dollars a pound production will follow production did follow because that a problem here kazakhstan brought on 10 times the production during that time and then fukushima happened there's too much supply that the price goes down so the the commodity prices will tend to stay below the incentive price for too long and then they go above the incentive price for too long right now we're still below the incentive price so we are still excited about uranium you own both the sprott physical uranium trust and also yellow cake tell us why for the very reason that we just talked about the uranium price is still below the incentive price that is the the long run place that that we're using so once we get closer to that you will see us trim out of out of those stocks and in terms of the big cap producers you own both kozada prom and also kamiko given one is based in kazakhstan and another one is based in canada do you value them differently from a theoretical value standpoint no every company that holds uranium gets 30 uranium that's the cost that's the the amount we think they'll they'll earn over a long term however we are talking about kazakhstan and canada and obviously we want a much larger margin of safety before we invest in kazakhstan than in canada because that probably is cheaper than kamiko on a per pound basis and therefore there we do see more upside with kazan problem however you have to heavily risk adjust for the geopolitical risk both of them have fantastic minds and they both have extremely long reserve lice management teams have done very well so so we like both of them we prefer one geography over another have you or any members of your team done site visits to either one many men are two members of our team have gone up to to camoco's mines uh we've not yet visited kazakhstan however that sounds very interesting we we do travel a lot to see a lot of the the mining companies that we go to um my favorite trip was in was going to mongolia to visit the oi tolgoy mine uh the copper mine oh wow when was that was 2016 i believe yeah so there's a number of uranium mines shut down due to the low price with the largest one being kamagos macarthur river you already touched on that and you mentioned that this notion of the incentive price being where the price where people are incentivized to start producing again so what price do you think we're going to see an influx of minds coming on and in mind starting up again it's an estimate it's a tough price to to be accurate about but we think anywhere between 70 and 90 dollars a pound we're not gonna argue one way or another um and the reason it's it's a large range is as i mentioned that supply curve is pretty much a vertical at the far end so if you see more demand than you expect then you're closer to that 90 a pound than the 70. lisa let's wrap it up on where you and your team see the uranium price going you mentioned that you think the incentive price is somewhere between 70 to 90 dollars but does it get back to its all-time high of 137 dollars a pound it very well could often times um the the prices overshoot the incentive price so so we could see that however the solution to high prices is high prices and and you know we will probably see a lot of production come on and and then prices will will come down with with more supply um the other the other thing that that is bullish for commodities is the fact that we've had a huge amount of money printing um this reminds us a lot of the 70s where you had governments financing deficits through printing money and they had a lot of inflation and and real assets went up a huge amount uranium for example went up close to seven times in a matter of three years so that just gives you a sense of the scale that you you might see with with inflation should that um should that move its way into the the real assets real assets today versus financial assets are the cheapest we've ever seen if you look over a hundred year period they're cheaper than they were in the early 70s before they skyrocketed higher so there's a very good chance that uranium well overshoots the 70 to 90 range however our you know we're not going to price that into our our investment thesis you know i think the other element that's totally different this time than we saw back in 06 and 07 is the fact that the two largest producers in the world because out of prom and chemical have become much more prudent and disciplined in their approach in that they're they're just not dumping pounds onto the market they're actually shutting in supply yeah kamiko shutting down macarthur was was the right thing to do and we have a lot of conversations with with management teams of mining companies saying why are you selling your resource into an oversupplied market um you know if what a lot of these mining companies do is they say oh well look at our our cash costs it's less than than the price we're making money but we say well it took you sixty dollars a pound to find that and you're selling it for twenty or thirty dollars a pound to us that that is a money losing um action but but a lot of people just look at the cash class and they don't see that so so kamiko did the right thing it didn't look good from a from a dcf point of view and when you are when you're just counting cash and that is a big problem in the market is is investors are only looking at current cash flows they're they're not looking at the the cash flows that would come in in 10 years and when you're dealing with an underpriced good and a scarce good dcf models don't don't really capture that value one more question before i wrap it up elisa and it has to do with sports tampa bay has some incredible sports franchises the tampa bay buccaneers won the super bowl earlier this year the tampa bay lightning won the stanley cup in two consecutive years what's your preference football or hockey oh i i'm the worst person to ask that question i i'm unfortunately not a a good sports fan so um that's a better question for for somebody who who pays attention to sports i i inherited some sports teams by through marriage but that's as far as i go you're just focused on making money that's right i i my all my attention is is on finding investment opportunities yes well lisa i want to thank you very much for spending time with us today and sharing your thoughts on uranium and how you value the equities and also where you think the price is going once again thank you thank you so much for having us happy to happy to be here [Music] [Applause] hi david and thank you for joining us today hey jimmy my pleasure thanks for having me david we have a lot to discuss in a short period of time so why don't we just start it off with a brief overview of denison mines and maybe just a little bit of the history behind the company jimmy if we went into the history we'd be we'd be here for an hour but um today dennis and mines we're a diversified developer multi-assets focused in the athabasca basin region in northern saskatchewan our strategy is around developing one of the lowest cost uranium mines at the right time in the cycle and so our flagship asset is company called a project called wheeler river we have an effective 95 interest in that project and we've taken it from discovery all the way through through pea pfs and now recently announced that we're launching a feasibility study for the project while we've already been in the permitting process for the last few years now that's our anchor but as i said we are a multi-asset company so another important asset in our mix is a 22 and a half percent interest in the mclean lake uranium mill uh and the mclean lake joint venture now our partner there is a rano one of the world's leaders in uranium mining and they operate that mill currently processing ore from the cigar lake mine under a toll milling agreement the only operating uranium mill in the athabasca basin region and important for us the fact that it has excess licensed capacity today now i kind of round out the picture with a few other assets that fit into our development profile we have a 66 67 interest in a project called waterbury where we have another pea stage project for isr mining that is square in our development profile it's called the tht deposit and then add in some of the other projects that we've acquired over the years like midwest and mclean to give us really that sort of development portfolio rather than just a single project company last part i've flagged just in terms of where we are today and our asset mix is we have acquired two and a half million pounds of physical uranium and that is a bit unique for a development company and i'm sure we'll get into it a little bit but a really important asset on our balance sheet as we move forward with the development of wheeler river that's great well that's a lot of information to unpack so let's start with wheeler river that's your flagship property as you mentioned but it's comprised of two different deposits the griffin and the phoenix and you're going to use two different mining methods on each of these deposits so let's start with the phoenix deposit you're going to use in situ or isr and this has never been used before in the at the basket basin but it has it or it is used extensively in other parts of the world and it can be quite profitable so why don't we just touch on that and just give us a brief overview of isr and what exactly it means yeah no that's that's a great great introduction look in situ recovery is the most prominent mining method for uranium in the world it's not been used in the athabasca basin and part of that's because the athabasca basin is not textbook for the application of isr but at the end of the day i mean we've spent several years now advancing this idea of bringing the world's lowest cost uranium mining method to the athabasca basin where we have the highest grade uranium deposits and when you really drill into i'm sorry for the pun on that but when you really drill into how isr mining works i mean you need permeability you need leachability and you need a way to contain your mining solution and in the in the basin the containment has always been the concern in that the geological setting of many of the deposits is not textbook and that there isn't a containment around the mining horizon normally that's created in in say kazakhstan or the united states by by just the geologic formation itself now what we've done is we're bringing an established mining technique which is ground freezing it's used every day of the year in the athabasca basin right now macarthur river cigar and we're going to bring that into the isr picture and that's what changes everything for the application in in the athabasca basin so at the end of the day what we'll be looking at for our isr operation is a series of borehole wells no different than any other isr operation and those wells will take the form of either an injection well or a recovery well injection well you'll be pumping in a mining solution in our case it'll be an acidic solution that solution is going to percolate through the natural permeability and some of the enhanced permeability that will create in that ore body and as it moves through that permeability it's going to dissolve the uranium or leach the uranium that's already in that host rock on the other side we've got a recovery well that's going to be pumping that uranium rich solution up to surface and on surface then we're left with a very simple processing plant because we've already done the heavy lifting in normal mining processes and that we've already gotten to leaching you know we didn't have to excavate rock we haven't had to crush or grind it we're taking a uranium rich solution as if it came out of a leech vessel and now we're just precipitating out the uranium and moving through calcining drying and packaging and then taking our mining solution that's now stripped of the uranium refortifying it and sending it back into the well field and most of that's not that different from conventional isr but for the fact that we have very high grade ore and so there's a lot of uranium where we're putting our mining solution normally these well fields would be large and spread out over many square kilometers because the grade of uranium is very low often in isr you'll be measuring in parts per million and so the task is to search and destroy and find that uranium here we know exactly where it is it's in a very tight area and as we inject that solution will immediately begin leaching because we're going to be in very high grade areas some of these areas will be grading you know 40 50 60 percent versus ppm now that footprint and this is the last part of this story here but that footprint is important because the fact that it's compact allows us to use the ground freezing to surround the entire deposit with a fence of freeze holes and so it creates a freeze wall and that effectively is creating an underground leech vessel take the basement rocks underneath the deposit which are competent you freeze the ground all the way down from surface around your deposit and you mine within that vessel and so that's what our high-grade athabasca basin isr will look like a lot of things that have been borrowed from existing isr elsewhere an existing ground freezing that's being used in the athabasca basin but would definitely be it's a first of its kind in the athabasca david two questions first of all so that's what you're going to use on phoenix but on griffin you're going to use the traditional underground mining method why can't you use isr on griffin jimmy great question it's it's all about geologic setting so with phoenix our deposit is largely hosted within sandstone in a highly disrupted area on top of those competent basement rocks okay so this is an area that's bad for underground mining because it's water saturated it's all broken up it's difficult i mean you can look at cigar lake similar sort of setting mine flooded three times over at griffin we are situated in basement rock so that unconformity and that sandstone's above us and we're in the competent basement rock which is suited you know really quite well to underground mining because we've got that competency and it's less suited to the isr because we don't have the permeability that you have in that water saturated sandstone and for isr to work we've got to move the solutions through the rock for underground mining to work you need competent ground and so the two are just different because they are different deposits in different settings great explanation and one more question before i move on but we should also touch on the economics associated with isr versus traditional underground mining how much better is the isr method it has the potential to be the best in the world uh for phoenix you know it takes a combination of things but you know the capex is so different in isr up front you know there's no there's no pit to dig there's no shaft to sink there's no underground mine workings to develop before you get to first ore uh with isr we have an estimated upfront capex at phoenix in the range of 320 million canadian and that compares to other sort of greenfield development projects in the athabasca basin where you're looking at price tags well over a billion even griffin if we do the side by side you know griffin uh we don't have to build a mill we've modeled that we would use the capacity at mclean lake for that for milling but the mine itself is in the 700 million dollar range upfront capex because of the nature of underground mining and this and having to sink shafts and vent raises but with the isr that upfront capex so much lighter and then the operating costs you know you're using pumps and solution with a very minor processing plant minimal surface impact minimal energy consumption and with our super high grades we're able to potentially realize the lowest operating costs in the industry our pfs estimates operating costs for phoenix in the range of just over three dollars us per pound and then when we tack on all of the capital sustaining capital and initial capital we're still coming in under nine dollars u.s per pound at phoenix which could make it right amongst the lowest cost all in in the world even with the best assets in kazakhstan and you just mentioned or touched on the feasibility study what's the timeline associated with that david jimmy look it's it'll take what it takes um you know we haven't guided on on completion at this point but what i will say is that um we've taken again a deliberate strategy and view around how this is going to come together so it's it's it's meant to be a consultative sort of process in connection with the environmental assessment we we are doing our feasibility in a way that will be informed by the assessments we've done over the last several years and the consultation that we've been involved in with interested groups uh whether they be indigenous parties or regulators so look i'm i'm expecting that we're somewhere in the 12 to 18 month time frame generally on the feasibility study but it will be what it is based on uh that work that we'll have to take in actual engineering but also that work that we plan to incorporate from our consultation david that's a great overview of wheeler river let's move on as you mentioned on the onset you also have an extensive portfolio of of uh exploration assets and i want to touch on this so why don't you just give us a brief overview of some of those assets including waterbury mclean lake and midwest jimmy look we've got a big portfolio of exploration ground i mean we were a consolidator for many years in the athabasca basin and uh we've got a large land position some of which are more advanced than others and so i like to think of it as a bit of a development exploration portfolio we are exploring on wheeler river and we are exploring in on the moon south project this year and we will always have a slant towards exploration around because we see the value we can create right from a discovery our focus is on exploration right now for isr amenable or potentially isr amenable deposits we think that uh that is a competitive advantage for us to be able to assess deposits from an isr standpoint and we really like the profile and the economics that we can pull out of isr deposits and so that's a good pivot to waterbury where here's a project that we own together with the korean nuclear power utility khnp we've got about a 67 percent interest there two deposits on the project one was formerly known as the j zone we've renamed it the tahel death tray or tht deposit following the completion of a pea and that's a dna name for for the area and that's a result of our consultation activities through the pea but this is a very powerful example of what isr could do from a development standpoint in our portfolio tht is around 10 to 12 million pounds at 2 percent and again hosted in sandstone in that difficult ground for underground mining it's it's understood to be sort of the western extension of the rough rider deposit with a view that it would never really be developed without rough rider being developed now we've totally changed the game on that deposit with this study using isr because you know our model is uh use the isr a lot of the things we've learned at phoenix but have this process this project send this material uranium bearing solution to mclean lake which is very close by rather than building our own processing plant for tht and that's allowed us to produce actually very interesting economics for such a small deposit so just to tease everyone and i won't go into much more detail but this project has the potential to produce an all-in cost pound of uranium under 25 u.s which would put it in the bottom quartile of most cost curves that people are running for the industry now to have 10 million pounds of 2 percent do that is really eye opening for the potential of isr and again it's just that light capital intensity up front and those low operating costs we wish we had more pounds there for sure but you know to be in the bottom quartile we can't complain this is a 177 million dollar npv in our base case so that that's a good example look i'd like to explore isr at midwest with arano uh where we've got a five percent 60 70 million pound deposit uh two deposits there midwest maine and midwest a and i'd like to explore it at mclean where we've got undeveloped deposits that are very close to the mill i just think there's so much potential for our existing portfolio with what we're doing with the isr david you have a lot going on right now with wheeler river and moving that through the feasibility stage and then you as you just told us you have a very extensive portfolio of various assets and you also have the mclean lake mill but have you ever considered or would you consider selling off some of those assets or maybe spinning them off into a separate company definitely something that's been considered what we struggle with jimmy is the long term so we are trying to build a company that will be durable and last for the long term and i look at many of our exploration assets and we like them you know we like them for the potential to make discovery and just like we've talked about you know our company sees phoenix as a catalyst that brings our mining to the market and then we see the value in having a portfolio of assets and with the isr you can be so nimble and so you know it's scalable it's it's it's just not the same kind of commitment you have with these large very large-scale athabasca you know giant projects so we like the idea of a portfolio we like the idea of making other discoveries now that said it's not that we're opposed to finding the right way to add value for our shareholders with i think assets that probably aren't being valued on their face value when people say well look i'm going to value denison on wheeler river and maybe waterbury and mclean you know hard to say whether we get credit for those exploration assets but that's our tension is we're saying look we would like to have a pipeline of projects we need to find a few more so you know what's the right arrangement of the right setup to be able to move them into a spin out or something like that where we can continue to participate it wouldn't so much be the kind of thing where we would just be distributing it out to our shareholders because we we want that pipeline potential in our own story david that's a good overview of uh wheeler river and your exploration portfolio why don't we move on to your balance sheet now your cash stop you you have just over 100 million dollars in cash you did a raise earlier this year you raised 86 billion dollars for the express purpose of buying uranium and this is something i haven't seen before in other industries and i'm thinking about precious metals or base metals is this a common practice within the uranium sector and why did you go and use that cash to buy uranium well it wasn't a common practice when we when we did it um but it became a common practice after we did it we have seen a number of companies execute a similar sort of strategy look it's i'll give you a bit of backstory on this what we're really focused on is developing wheeler river i know buying physical uranium doesn't seem to be connected to that but it really is we we saw the market activity earlier this year and we try to be savvy about the way we approach the capital market the investor interest in our sector in the first half of this year and it persists now but particularly in the first half of this year was very strong around the clean energy transition and the role that nuclear energy could play in that we saw a real opportunity to de-risk our future project financing for wheeler by accessing that depth of investor interest and our trade-off was this is you know could we take more money after we did our first round of financing yes there was more money there there was money for many of the names in the space and i was i was i mean pleasantly amazed by the amount of investor support for our sector but what would we do with cash that was our question is is this is this the exact right share price to raise money to de-risk the project finance and we struggled with that and where that got us to is okay but how can we take advantage of this window and we said look the capital's there what if we grab that capital because it's the right time it's opportunistic but what if we put it to work you know it's not dilutive if we buy assets of value and so we went at i went out and we bought two and a half million pounds of uranium at a purchase price under 30 u.s with a view that it would give our investors similar exposure to the commodity that our company gives them without that extra capital and that it would mean that that capital would be dynamic it wouldn't sit on our balance sheet as stale cash it would be dynamic allowing us to benefit if there was an increase in price and uranium it was not a speculative call it was not buy low sell high it was where can we store this capital where our investors will be pleased with it and really at the end of the day the plan is not to sell the uranium to raise money to build the project it's an option but what we'd really like to do is be able to borrow against the value of that uranium as we fund wheeler river through you know good debt package or whatever it might be maybe it's an off take where we can de-risk the off-taker by already having the uranium that's something that is totally different in the mining space that i've not seen before where a developer that doesn't have cash flow can go into project finance and say but look i've got a third or maybe half depending what the uranium price will be at the time of my project capex already on the balance sheet in a physical commodity that the lenders can take security in that i think has the potential to really change the project financing game for us and i think investors should look at our company as being significantly de-risked i mean that uranium represents somewhere between a third and a half of our capex for phoenix most developers are not sitting with a third to half of their upfront capex on the balance sheet ready and that's really what we were trying to achieve with that with that financing david you recently announced the implementation of an at the market equity offering or an atm and that was with cantor fitzgerald and also scotia but what was the reasoning behind that jimmy we look at the atm as really the best capital markets instrument uh for equity offering and it's not for everybody your company needs to be in a place where you can follow base shelf prospectus we we have done that now for not the second time and so we've got good experience with with that but it's really about um discretionary financing when it makes sense to do it we will be using we will be consuming capital that is the nature of our game as we move our project forward and the atm gives us an opportunistic tool to be able to replace capital with having minimal market impact so you don't have the impact of a big bot deal and a price at discount to market you do pay much lower broker fees so our broker friends may or may not be so happy about that but our shareholders would be happy about it you know you avoid the pressure of having warrants and things like that included because you're actually able to issue that stock into the market and again it's at our discretion when we think it makes sense to do that and give you an example of why something like this is useful we didn't expect that we would have an opportunity to buy a half of gcu which owns 10 percent a wheeler river and we were able to execute on that this summer and and increase our interest in wheeler river to 95 percent but you know we had that cash on the balance sheet we're stable and we're able to do that now with the atm we're able to replace that capital more organically more subtly without having a market impact and i think the key with these atms is there for companies that are well capitalized if if you're using an atm as a means to become capitalized i think it could be complicated uh in that you know people will see this as perhaps equity dilution but for us we're already well capitalized the atm really becomes a discretionary financing tool that we can use to actually benefit our shareholders and you just touched on this earlier but we should bring talk about the economics associated with a typical bought deal might be five or six percent that's what you have to pay the broker whereas the economics associated with an atm would be how much yeah you're talking in the range of two percent and the biggest difference well that's a significant difference biggest difference is that you're issuing that stock at market and you're not taking a discounted haircut on the actual offering and so that's that's where things really stack up right discount that stock because you're moving the quantity of it to new investors you want to have that de-risked plus you pay the brokers because you want that bot deal security uh all of a sudden you're quickly into double digits in terms of the cost whereas with the atm that stock's app market and the broker commission's much lower david as we wrap up here what can investors expect in terms of news flow in the coming weeks and months from dennis and mines or well as i said jimmy we're active in the field so look there's there's news flow through the balance of the year here as we wrap up our isr field testing at wheeler river with that tracer test and our commercial scale wells we're also active right now on the exploration front at wheeler river and moon south so expect results from both of those programs through the balance of this year and really with us in our de-risking we're never short of news so that is an exciting part about being in the permitting development phase for us normally permitting can be a bit of a dry period for uh development companies but with us and the progress we keep making on de-risking the isr we always have these milestones ahead every time we're making a technical advancement or de-risk achieving a de-risky milestone you'll see news from us and really it's about following us through that as we work through the environmental assessment in parallel with the feasibility study should expect a constant flow of news from us over the next you know 12 to 18 months that's a great overview and thank you for sharing the denison mind story with us today david and to all the viewers if you have any further questions for david or his team send us an email to info at bloorstreetcapital.com and we will get you an answer or if you would like some research on denison minds send us an email we'll send it along once again david thank you thanks jimmy my pleasure [Music] [Applause] ross thank you very much for joining us today it's pleasure happy to be here with you how are things in kelowna things are well in kelowna beautiful day um in the fall this is a vineyard country and harvesting i think is underway so lots of activity beautiful part of the world it's a great time of year so why don't we begin ross with a brief overview of fission uranium and give us a brief background on the history of the company sure well fission uranium i guess has been around for about eight years we were spun out of another company called fission energy and it really focused on the western side of the basin on a new discovery we had called pls and you know that that was the the beginning of the discovery of pls back in 2012 2013 and so you know we've been able to over the years grow a uh truly significant world-class deposit in the basin so you know fission uranium has one project only and that is the pls project hosting the triple r deposit so let's talk about the location of fission uranium in the basin and just so we can frame it where is it in relation to chemical so you know the history of the development in the athabasca basin really started off on the eastern side so the the first mines in the basin would have been the key lake mine down in the in the southeast side of the basin and you had rabbit lake in the on the a little bit further to the north and that's really where kamiko has you know established their land package and and this is where you know over the last 50 years you've had the majority of producing assets in the athabasca basin on the eastern side i would say that um the western side of the basin for whatever reason had been uh under look under explored uh some for some reason the you know the the philosophy was that there really was no appreciable uranium out there on the west side to be found so there hadn't been a lot of exploration activities camaco had very little exploration activity on that side of the basin but as a small company you want to take advantage of and do what other people are not doing and think outside the box um i had worked before on uranium properties in the western side of the base and there had been the clough lake producing mine so you know in my opinion at the time they're you know i thought the west was you know just as likely to hold large high-grade economic deposits as the eastern side it's just that they hadn't been looked at so in fishing uranium we took advantage of that model the fact that we were out looking where nobody else was we didn't we looked around the edge of the basin where we were looking for shallow deposits and we made a discovery back in the fall of 2012 of high-grade uranium outside of the basin um about a year or so later than that next-gen made the discovery of the aerodeposit right on trend with hours it's about three kilometers away from from fission's triple r deposit and you know since that time we've shown that the western side is producing superior deposits to anywhere in the basin and really i think uh you know the real change is that the the next generations of mines to be developed will be coming out of that southwest side of the basin so i think that you know from that discovery nine years ago to where we're at now i think that uh you know that's truly the future of the athabasca basin and ross how is the southwestern side of the basin different from the east side just in terms of geology if it is yeah i think what's remarkable is a similarity um you know we we're able to have high grade deposits on the eastern side and we're also seeing that we have high grade deposits on the western side i think the the real difference is just the under explored nature on the on the western side of the of the basin so um you know our deposit's a little bit different we're outside of the athabasca basin margin itself so we're in what we call basement rock basement rock is a lot more competent um and uh you know if you can if you're trying to develop an incompetent rock so it's a lot less technical risk a lot less um expensive we'll say uh you know it's you have a better chance of getting it out of the ground than if you were inside the athabasca basin itself with the the problems that you may encounter at the at the bottom of the sandstone and that basement interface where a number of deposits are but what's unique about us as i said we're basement hosted we're just outside but we're near surface and so light gray the closer you are you know is important great is important but the closer you are to surface i think you know it also de-risks a project an awful lot and it's uh less um expensive to get the aura of so we're basement near surface large and high grade and that's really what uh you know it's kind of unique about the project and when you say it's near surface what would the depth be yeah so 50 meters below the surface and in fact the only thing uh you know we have a an overburden layer that's about 50 meters and it's just dirt you know piled up over the last ten thousand years or so um sitting on top of the bedrock our deposit starts right at the top of the bedrock and so the first hard rock that you encounter by mining is actually the word deposit itself so very shallow you know if you want to compare that to say some of the operating mines in the basin right now um cigar lake is about 400 450 meters below the surface and we're as i say 50 meters so you know orders of magnitude closer to the surface ross that's a good overview of the company and the background of the company and also the importance of the athabasca basin why don't we focus in now on fission and your triple r deposit can you just expand on that please sure yeah as i mentioned you know we um we made the discovery back in in the fall of 2012 we advanced quite quickly uh you know with very successful programs in the early years in 2013-14 outlining what looked to be a truly sizable deposit we had our first maiden resource back in 2016. the same year we did our um our pea study uh sorry 2015 we did our pea study and then and that was positive so we moved it along to to the pre-feasibility study which we completed in 2019 everything in the pre-feasibility study told us that yes this is a very viable robust project and that we should be going this next step that's feasibility so we've been able to you know i'd say very successfully each year just march it further and further down the line ultimately you know the goal of course is to be a producing asset and we're you know somewhere along the halfway point to that between discovery and a producing asset but um a truly successful uh you know march along that path and i expect the same as we go forward so maybe you can just tell us about the five different deposits within the triple r deposit and which ones are included in your mine plan sure so you know they they um there are five of them they all occur i kind of again it do pearls on a necklace you know we have a a blob the first one is called the the 1515 and then we move into the 840 0 and the 780 zone and then the 16 20. so they all kind of sit side you know along along the same trend in blood the biggest uh and most important of the zones is the is the r 780 zone that was um between that and the discovery zone the zero zero those are the two that are so far in the pre-feasibility study because they've had enough drill holes to to get the the kind of data that you need which is called indicated category or that's just the material you can move forward into the pre-feasibility and feasibility so the other three zones we know they're there we've done enough drilling on them to show their inferred resources but not enough to bring them into indicated and it's indicated that's required to carry on the economic studies um so there really are only the two zones so far that make up the pre-feasibility study but the the note that i'll say is that the next one in line most likely to be brought into the mine plan is the r840 west zone so it's it occurs about 500 meters or so west of the 780 zone um that's been the focus of some attention this year we did some drilling on it and the the aim there is to get enough drill density that we can convert that to what we call the indicated category bring it into the mine plan and so if we're successful and you know we would finish the drilling the modeling works out we do have indicated we'll be able to bring that into the mind plan into the feasibility as we move forward so as you mentioned the pre-fees was released in 2019 it's a couple of years old now but nonetheless it can still give us a good backdrop as to the economics why don't you just talk about the capex associated with this project the rate of return and also the payback sure well you know the capex on on athabasca deposits is expensive um you know we're looking at around 1.2 billion dollars in capex now part of that is also because we don't have an operating mill on the western side of the basin you know these are new deposits new discoveries you don't have some of the established infrastructure that you might have on the eastern side and the mill is is a major component of that um so in our in our economic studies we built in the cost of building our own mill building our own uh bringing in power so generating power on site um in these elements i think that um you know particularly as you see the with the next gen deposit also advancing uh quite successfully towards production as well i think hopefully we'll see one common mill so you know the ability to shave off a great deal of the capex you know as we as we go forward um sharing in infrastructures uh mill power you know all kinds of things um but so that's the pre-feasibility is really based as a standalone project there 1.2 billion capex what's truly remarkable here is the very very low cost uh projection for operators so we're looking at operating costs we're looking at just over seven dollars a pound u308 to as an operating cost on on the triple r deposit that would put you in with some of the lowest cost producers in the world and uh you know and i think that that's really what what makes not only do you have a big deposit high grade but very low cost so you know the economics obviously have been very very impressive we're looking at a 25 percent irr after tax you know and an impressive mpv of around 700 million dollars so you know i'd say the economics are very robust and that's the reason that we're moving forward with the feasibility study to basically support that that study and get it up to the level that's that's needed in order to make a production decision and ross i just want to put that seven dollar number into perspective how would that compare to kamiko's cigar lake so cigar lake and macarthur the um you know macarthur's on hold for the moment but those assets would be producing uranium at around 14 dollars 15 pound uh u308 so we're looking at you know potential operating costs of about half of that uh for for cigarly and i think a lot of the reason is it's less complicated it gets back to the argument i mean a little bit earlier about being in basement rock less technically challenged uh challenging to get it out of the uh to get it out of the ground and you know it's just lower cost operating to be in basement rock so yeah we're looking at a pretty favorable uh scenario for the triple r so as you mentioned you've commenced the feasibility study why don't we just talk about the timeline associated with that and when do you expect it to be released sure so the feasibility study which we just started embarking on this summer it's probably around an 18-month period in order to have all the feasibility work completed the report done and submitted so i'd say by the end of 2022 feasibility is projected to be finished but that sort of opens a door into the next phase of work which is the on the permitting and the eis side so once feasibility is done at the end of 2022 we enter into the environmental impact assessment phase which is probably about a three year period so coming out of the successful permitting side we're looking at around 2026 by the time this project is ready for construction to to become a producing asset and uh and what we've seen at the pre-feasibility that's about a three year period to to get into production so producing asset towards the end of the decade so 2029 somewhere in that not that frame so once again construction would start in 2026 right in production 2029 correct yeah three years from the start of uh you know construction to uh the the ore coming out and and through the mill i wonder i wonder what the price of uranium will be in 2029 yeah i think it's going to be quite good you know we've seen what it can do in a very short period of time you know just over the last uh whatever call it a month we've seen the price go up uh 20 so it's moved from low 30s into you know low 50s high 40s in a very short period of time um it does show you the volatile nature of the price and that it really once it gets going there's a lot of torque i don't know what it's going to be in 2029 but we're really at the point right now we're pretty close to where we've done our um you know that we use as a base model for our pfs study you know which is uranium at 55 a pound well that's kind of where it's trading at right now so um you know forward-looking it could be anywhere but i think the the the answer is north of where it is right now let's hope though so you recently released the results of a 25 hole drill campaign and i believe those holes they were focused on the r840 zone is that correct that's that's right yeah they really were and you know as i mentioned with their the aim for those 25 holes was to have enough drill hole density in the r840 zone that we can convert that to indicated our holes hit where we expected them to the results were overall really really good we think we're still waiting for confirmation from assays but the radioactivity and uh you know we know the strength of radioactivity and how that relates to grades so i think we're pretty encouraged with what we've seen um you know it'll still take uh looking at the overall results and modeling it to see how it fits in if we can convert to indicate it but i think i think we've done a good job at that and so you know very likely the feasibility study resource will include the the r840 and certainly that's the goal and i think we're uh you know a long way to achieving that so that was what the summer program was all about that we put news out about uh two or three weeks ago so we did a great overview of the the history behind the company and also the importance of the athabasca basin and the economics associated with the the project why don't we move on now to your balance sheet and also your shareholders and how much cash do you currently have on hand so we have uh 50 million dollars in the treasury right now so we're we're doing really well you know that's uh certainly enough money um to get us through the feasibility work next year you know we're we're not uh yeah we're not hurting at all in that department i think we're doing quite well so strong balance sheet and um so you know we're very comfortable with where we're sitting you recently did a raise in the month of may you raised 34 million dollars can you give us a little bit of color on that what sort of demand did you have was it institutional was it retail canadians americans yeah demand was instant you know when we put the uh you know the raise out um you know it was filled right away um and the demand was primarily institutional and that's something we've been focusing on in the last years building up our institutional ownership you know about a year and a half ago our institutional ownership was quite significantly below 10 now we're um you know we're sitting at around 20 20 or so institutional ownership for the shares plus we have a strategic owner with cgn one of the chinese state-owned utilities so between cgn and and the institutional uh ownership shares we're it's almost half of the uh you know the shareholder base being institutional now so i'm glad you brought up cgn or china general nuclear i'm not familiar with this organization maybe you can just touch on that they are your single larger shareholder at 15.2 but exactly how did that relationship start so you know um if you if you look at the uranium market and you know all eyes have been on for the last 10 years what is china doing you know china has been the biggest growth story out there um in as far as building reactors and where's the future going uh you know who's going to be the largest consumer of you know nuclear fuel for power generation and it is china there's really two state-owned utilities in china and cgn is one of them and i guess arguably the biggest of the two although i think they're fairly similar in size between them and cnnc um but they uh you know they took they were shopping the world looking for new supply for their uh you know projected build out of reactors um and you know they honestly they did a pretty thorough review of all the assets out there they you know at that time we just completed our pea and that was when we had more serious discussions with china because they were looking for you know source out of north america um secure source uh of uranium for the future so they've been a very important investor right from you know for the last five or six years now um and uh yeah they're ultimately they're they're the end source user and uh you know very well capitalized group as well so you know they're good partners to have and how involved are they and how often do you speak with them well they speak to them quite frequently they're not involved on the management side um you know they're they're an investor in the company they do have two board seats uh out of seven so they you know they do have representation on the board um and we also have an off tank agreement with with cgn so the off-tank agreement is for 20 of production they have an optionality for an additional 15 so you know if they exercise that option they could be up to 35 per year um but they're still paying market prices for the uranium so they're still paying spot price for uranium but at least you know you've got a guaranteed customer down the road for for a third of your uh of your production and i'm kind of i'm curious are you able to speak with other strategic investors or do you have some sort of lock up yeah no there's no uh exclusivity uh in with with cgn they're just a strategic um investor from that perspective uh no we're able to talk to you know just about everybody so and this is the other thing i think that you know makes us unique too we're well i think pretty important is that we're we own 100 you know the pls project is not a joint venture in any way we have a hundred percent of the asset as well so yeah i mean we do talk to all kinds of strategics and investment houses on a on a regular basis and did cgn participate in that equity deal that you did in may no they uh they did not participate in the in the last we did three financings in the last um call out about a year i guess um and they didn't participate uh in the financing uh i think you know participating in financing is is something that happens on a very quick basis and um you know they at the time they they weren't able to uh to participate in the in in the in the rounds but they still maintain their interests of course in the in the company and and realize and recognize that it's an important investment for them do they have any other investments in the basin no no we're the uh as far as i know we're the only north american investment they have as well so nothing further in the in the basin and i don't believe they have anything else where um you know where they they have different investments in other jurisdictions i think they're in australia as well they have some participation and also in africa but in north america just fidgeting uranium ross as we wrap up what can investors expect in terms of news flow over the coming months well we still have our assays outstanding from the the 840 west stone drilling that we did which is 25 holes we also had some mineralization in our metals or metallurgical holes um large metallurgical holes or uh four of them and some geotechnical so there will be you know a raft of acids yet to come um and then it'll just be uh you don't know constant updating on on the status of the feasibility and uh and permitting as we move forward so i'd say a pretty rich news flow over the next year and a half well ross that's a great overview of the fission uranium story and i want to thank you if any of our viewers have any further questions for ross please send us an email to info at bloorstreetcapital.com and we will get you an answer if you would like some research on fission uranium send us an email and we'll send that along once again ross thank you thank you very much real pleasure [Music] [Applause] hi tim thanks for joining us jimmy thanks great to be here with you tim before we do a deep dive on iso energy i want to highlight your background you have a very unique background in that you worked at chemical for over 20 years and a big part of your job there was marketing and also trading in uranium so you have a good sense of how utilities react especially during volatile times like we've seen recently when the price of uranium's gone from 30 to 50 dollars a pound but how do you think the utilities are reacting to this sudden price movement that we've seen and this new player in the market and do you think they're concerned at all about what's happening in the spot market or do they only focus on the term market yeah no that's a good question jimmy i mean they're clearly focused on it and they're clearly paying attention any time the price goes up from 30 to 50 of the matter for a few weeks it raises a lot of attention and you know we've been in such a down market such a you know a downward cycle for you know really for 10 years that there's been a lot of inventories available to utilities there's been a lot of um actually even different buying practices traders having material it's been a lot of this uh what people call carry trade deals done where you know traders buy material finance it very cheaply and then they're able to just provide it at a fixed price into utilities and this is safe material sitting in storage so that material has been available for a long time and and the price hasn't moved in fact it's been very very soft for a long time so yeah the fact that the price has moved uh you you mentioned a new player that's i think you're referring to sprott the uranium trust having come in bought a lot of material but you know they bought a lot of material and the price moved very quickly and there's been other players that have bought material and the price hasn't moved that quickly and i think it's because the market has become thin we've we've been you know living off of inventories for a long time production primary production has gone way down over the last few years curtailment by kamiko by kazzatum prom and uh and and now you know we're seeing somebody goes and buys material the price moves quite a bit and and certainly utilities notice that and and they'll start i'm sure thinking about uh they're buying uh even more so than they i'm sure they have been in the past uh year or two and when you talk about utilities who are the typical buyer of uranium but who exactly are some of the bigger players in the market yeah i mean you know every geographic region kind of has their big ones i mean in the states you know it's really consolidated a lot over the last decade or two i mean in the us the big players like exelon the duke powers of the world dominion these kind of guys i mean in in europe obviously edf i mean the french still get more than you know 70 of their electricity from from nuclear and so that's electricity to france and um you know in in asia obviously there's two big uh utilities in china uh cnnc cgn they're building plants like crazy so there's there's these big players and then there's a lot of other regional smaller players that might have two or three reactors and or even one reactor still there's a few of those utilities they're important part of the market though because there is really a very limited amount of customers and they're very you know spread out globally and i'm curious what a typical contract would be in terms of length and also pounds yeah i mean it's changed a lot uh in years i mean there was a period where you know you kind of made generic you know comments about you know in japan they you know long-term contracts 10 years and and europe might be a little bit you know shorter and the u.s tended to have the shorter contracts but you know in in recent times there's been you know a lack of long-term buying and like i mentioned before there's there's been a lot of this carry trade you know material or carry trade deals in in the market that allowed utilities to you know buy in the shorter term fix in some very low prices for a period of time and and just keep doing those for you know on an ongoing basis really low risk pounds and and very low cost so um contracts have certainly shortened in length over time but that's with uh an abundance of inventories available and some you know some comfort in the market so certainly you know when you start to see the market turn like this you know you have to expect there's probably probably some change ahead as well tim there's talk that there's anywhere from two to four rfps out there is this the utilities choice trying to find out what's happening in this new market they're just testing the waters yeah i mean i think at any given time i mean people talk about there not being a lot of long-term or utility buying there's always some utility buying in the market you know people layering in contracts these bigger utilities have to keep layering contracts on top of each other to make sure that they're covered but but certainly there's there's been a little bit more activity in the market lately um yeah certainly some utilities are looking to you know maybe try to get into the market before they see even bigger turns or if they think it's sustainable which many people believe this this uptick is will be sustainable then you know maybe getting in ahead of the curve and and certainly there's others the big ones that will go in and test the market to see you know what is available who who is out there and who can provide me uh the pounds that i need over the over the period that i needed those are great insights tim thank you so let's move on to iso energy and why don't we just start with the brief overview of the company yeah sure i mean iso energy we're fairly new we've the company's been around since 2016 and it was a spin out of nextgen um when next-gen found arrow obviously a lot of attention uh went to that that big project and focusing their attention they had some great properties in the eastern part of the basin so they spun that out into iso really you know in retrospect what's probably at the bottom of the market so in a lot of ways it was a tough time but um but but really good timing in a lot of ways as well what what iso's done since is been able to you know get into the market uh and buy buy up a lot of other properties you know we we now have 24 properties some really good property in the athabasca base and mostly on the eastern side and and that's something that even today there's a lot more activity and interest in the market you wouldn't be able to pick those up so they they started with these great five properties they picked up a great portfolio and then um one of the the best of course being the lorac east property that we bought in 2018 off of camaco the company went in there uh the team really had some some insight into where they wanted to drill they sunk a hole at the end of the summer uh 2018 program and hit mineralization which has become the hurricane zone which um you know last couple of years has been focused solely on the rock east and and hurricane summer of 2020 they really had you know had some real advancements on that project hitting uh grades of you know almost forty percent over seven and a half meters you know three and a half meters at you know over 70 percent uh u308 so some really incredible grades and and that project just continues to kind of grow in size as we as we continue to do work on it so as you mentioned the uh property that you're focusing most of your attention on is the hurricane zone why don't you just tell us about some of the holes that you drilled this past summer yeah so like you said you know 2020 was a really good program for iso but we took a step back in the winter and didn't didn't actually drill last winter because of covid i just wanted to respect the request of the government to stay out of the north if you could and and the communities frankly that we're dealing with we you know uh they were some of the hardest hit in saskatchewan and even canada so we wanted to be respectful of that so um coming to the summer things we're looking a lot better we're back up on uh the property on the rock east we're doing a 30 hole program this summer we've completed uh a number of holes already so we we released some some information just on the first four holes a couple weeks ago we wanted to make sure people knew we we were working we've already had some good results we've you know the results to the north and the south have already expanded the width of the deposit and and we've still got a number of holes left left to do we're going to be up there really a little bit late we're drilling i was up there last week in fact for the whole week the team is working hard we've got a great drilling team on two drills one's really focused on expansion of hurricane and the other one is more focused on exploration uh down the conductor at the rock east which is really you know a 15 kilometer uh conductor to the east of that property so there's a lot of property to explore and uh and yeah we're we're doing a great job up there on on the rock so i know it's only early october but what's the weather like in northern saskatchewan this time of year yeah you know it's incredible we've had a you know if you're not a farmer and uh and aside from the forest fires we've had an incredibly warm beautiful summer but we we did you know struggle with forest fires up north and and farmers here had a tough at a tough year of drought but but even last week um we had one day where it was sunny and beautiful and the little flies came out again to bug you uh which is a good sign of good weather um the day i left though it was raining and it was kind of that fall feel in there and you you could have sensed that snow was around the corner but uh i'm hearing from the team it's still it's still pretty decent up there tim when it comes to the base in both location within the base and also depth is very important can you speak to that and do so in relation to the hurricane zone yeah sure i mean you know at the end of it all that's one of the biggest strategic advantages we have in saskatchewan i mean the the deposits in northern saskatchewan are known to be the best in the world and it's it's really for a couple reasons i mean they are the highest grade by far many of them 100 times the world average of other uranium being mined so that that grade alone is incredible um the other things that become important is you know if you can find those grades in the right geology at decent depths um you know that's a big advantage hurricane for instance is only about 330 meters below surface which in in the you know within the basin that's actually a pretty relatively shallow deposit and so that that's a big advantage when you're when it comes to the mining piece you know down the road um other than that like the the jurisdiction itself you mentioned you know location being in saskatchewan is a big advantage i mean saskatchewan's been ranked by a number of places one of the best best jurisdictions in the world to mine you know mining journal i think this year ranked at one fraser institute's ranked it in the top three last number of years so you know you've got a great supportive uh environment to explore and to mine eventually and you've got the highest grades in the world by far so as you mentioned earlier the drilling campaign at hurricane is still continuing are you going to have a winter drilling campaign also yeah that's the plan i mean this year we actually even for the summer program we expanded it a bit the last two years have been focused only on lorac east and hurricane given that we found that in 2018 and and obviously that will continue to be our focus um but we actually spent a little bit of time even this summer back at our geiger property which prior to buying rock east was our was really our top pick so it was good to get back there we did a 12-hole program there um you know we had some decent results that we we want to continue to to look at we're waiting for assays on that property and we you know are continuing to wait for assays on the initial holes at hurricane as well but yeah the plan will be to look at those results see where we want to you know see what kind of results we had and from there we'll plan out a winter program and subject to you know board approval and all that good stuff uh we absolutely plan to get back up there for the winter just one more question on the hurricane zone before we move on but it also borders on a property that's owned by kamiko and have they done any work on that property yeah i mean historically they've done quite a bit of work and you're right the i'm not a geologist but when you look at you know the drawings of our hurricane deposits so far it does border right up to the west on the dawn lake property and it's very clear that there's something on the other side um there's a lot of historic drilling there you know a few months ago they hadn't been focusing much attention there you know i i think they're starting to look at it a little bit just from you know casual conversations with with the kamiko rhino folks i think there might be some interest in going and having a look at the other side um that'll be up to them obviously but but obviously that's a big part of the story too because as we as we go forward and finally define the boundaries of hurricane and we haven't called a maiden resource yet uh it'll be important to know exactly what that story is on the other side as well if you look you know if you're fortunate enough to have such a deposit that you go through into development and and further on so um yeah if if work does start there that'll be a very good indication of uh of kind of telling the other part of that story tim you mentioned earlier that you do have 24 properties and we've already touched on two of them i don't want to touch on all of the other 22 but i'm sure there's a couple you want to highlight what would they be yeah i mean you know we're actually going through a bit of a strategic review of you know where is it we want to spend our time and money we're like i said we're going to continue to do work on on the rock and hurricane hurricane is our focus to find out you know exactly how big that deposit is um we do want to continue to explore along that conductor uh on the rock east and and geiger yeah will continue to be important uh to us down the road uh we'll continue to do work there as well especially having you know had but i think is a successful program this summer um we've got some other airborne uh geophysics planned uh this this fall uh on a property called collins bay extension uh we'll be doing that right away so we'll determine if we want to get onto that property but that's when a very a lot of interest to us it's on the same kind of uh trend as as some former minds rabbit lake and others so um and there's and there's a lot of other great properties properties in the portfolio so it's just a matter of again figuring out what we can do um in a timely fashion with with the capital we have and where we want to focus our time and resources good so let's move on to your capital and also your balance sheet and shareholders and i first want to ask about next gen they are your single largest shareholder at 51 how involved are they yeah i mean uh they're very very involved they're an important part of the company i mean our our chairman is lee courier who's the ceo of nextgen you probably know we've got board members that are our board members on nextgen as well it's you know it's really what i would consider a strategic advantage we we certainly get financial support from them you know for raising money they're very interested to maintain a large share of the company but but even more so like um from a technical side from just a day-to-day working side they're willing to help out if we need you know another set of technical eyes on on expiration or just any part of running the company they're there to help because they're they're they're invested in uh in the success of iso so yeah they're very you know very supportive they're there whenever we need them and uh yeah i think again it's a strategic advantage for iso tim you're sitting on just over 13 million dollars in cash and how is that money going to be spent between now and year-end yeah i mean we started probably the summer before the summer program was about 15 we're down to about 13.4 i suspect by you know the end of the year we'll probably you know right around 10 million dollars by the time we you know we spend on our expiration program probably around a 5 million spend this summer and then some options warrants come back in so you know we're in a good situation financially we've got uh enough money to keep us going this year and even through a winter program obviously the market's doing well there's people that are interested investing capital into this sector and into iso so we'll look at that we we've looked at that from time to time we don't want to you know uh raise capital just for the sake of raising it we'll we'll do it when it's you know best for the company and and and uh and when we need the money uh to use and put to put to work uh for the for the growth of the company but but yeah for the time being we're in we're in really good shape if you're a shareholder of iso energy you're very happy the stock is up over 150 percent year-to-date and it was up higher but it's pulled back a bit but are you getting a lot of calls from from investors and if so are they canadians americans europeans yeah i'd say i'd say all over the board i mean we get calls every day um certainly a lot of you know u.s interests which is great um the canadian market knows you know nose is probably the best and and certainly they probably know the uranium industry in canada the best so lots of very supportive canadian shareholders um you know i've been on a couple of you know uh investor conferences and when when you do that you really it's it's you know you put together 20 or 30 meetings in two or three days and it's it's people from all over the place i mean asia's very interested there's certainly a lot of um you know great investors in you know europe switzerland germany that are that are on the line interested in the story and so yeah i'd say it's it's just it's gaining because it's it's not just people in the past that have been in the uranium sector and understand it um you know the narrative is changing right the narrative around nuclear and the fact that it's becoming a bigger part of the climate change story and people are are really believing that and and embracing it and and also as an esg investment like you know a few years ago that would have been unheard of that nuclear or uranium would be considered in that in that space and it's starting to so you're getting a whole different group of investors that are are starting to really want to know uh what the uranium space is all about so yeah it's been it's been really positive so the europeans are giving up on gold they just carry on uranium now well maybe we'll see we'll see i'm sure they'll stick with gold but it's nice to have uranium in the mix there a little as well tim i just want to ask you one more question before we wrap it up but you mentioned earlier that you spent 20 years at chemical you also worked at denison which is a large developer and now you've gone over to iso energy which is an explore code what was it about iso that attracted you and why did you not go work for another developer or a producer yeah i mean i wasn't looking to move at all i mean uh denison it was great they're moving that project along and it's really an exciting project it was just the opportunity came to me and it was it was one of those that you kind of go you know these don't come along every day um you know i tracked iso a little bit i hadn't see you know been following it that closely but i knew they had this you know this new discovery and when you start looking at you go it's actually in a really unique spot it's it's really the only company not just in canada but but globally that's found a new high-grade deposit over the last few years and you know i i believe in the nuclear and uranium fundamentals i i mean that's what this is all based on i mean you can have these big upticks in price because someone's buying but it's because the funnel underlying fundamentals are supporting that and and you've seen it over the last few years they're really starting to turn in uranium's favor and yeah when iso came lee you know leads the chairman who approached me it was it was one of those things where i just knew that it was something that would be exciting and and a bit of a stretch you got to keep you know kind of stretching yourself uh to kind of grow and i knew i had experience that i thought could be valuable here but also you know that i would learn a lot of new things which i am every day and uh yeah so so that's great and i also the other the other positive was you know i am working a little bit with next gen as they move forward on arrow uh providing some advisory services on on the marketing piece so it was nice to have that piece where i can kind of keep my my finger in the market which is you know continues to be uh you know a passion of mine tim as we wrap up what can shareholders expect in terms of news flow in the coming weeks and months yeah i mean we're continuing to explore at lorac east obviously so we've put out um one release on a few holes we'll continue to share that information with the public as it as it comes as the the holes are drilled and so you know we'll put out news on that um and then later as we continue to get the geochemistry work done and the assays are coming through we'll share that information on not just on hurricane and the exploration there but also on geiger um yeah so you know over the next number of weeks and months there should be a lot of information coming out of the summer drill program and then of course like i said we'll we'll start turning our attention to the strategy and planning to the winter program and certainly share what we're expecting to do on that front as well well that's a great overview and thank you for sharing the iso energy story with us and also sharing your thoughts and on the utilities and how they're reacting to this current environment to any of the viewers if you have any further questions for tim and his team please send us an email to info at bloorstreetcapital.com and we will get you an answer to your questions or if you would like some research on iso energy send us an email and we'll send it along tim once again thank you jimmy thanks very much it's been a pleasure [Music] [Applause] hi lee and thank you for joining us today thank you jimmy great to be on your show lee you've worked in the uranium industry for many years and you've worked for many different companies and many different uranium producing countries throughout the world and now as the ceo of nextgen you're operating in the athabasca basin let's jump right into nextgen and tell us why it's so special yeah well look we we discovered based on all that good work and the geological department in saskatchewan has and uh it really did lead us to getting a good understanding of some exploration portfolio that you now see in nextgen which is the most dominant land position in the southwestern section of the basin and very uniquely on the edge of the basin so in principle if you're on the edge of the basin you're likely to find deposits at the most shallow as you go in the center of the basin it starts to get deeper and deeper and obviously mineralization will be less economic but we strategically picked up that portfolio in 2011 and 2012 and set about running additional geophysical surveys over it and just on that section of the of the rook one property where arrows located on the patterson corridor we really did zero in on on getting a sound understanding of the geophysical signatures that existed and uh with the discovery of triple r to the south of us along the patterson corridor um we knew we were in the right district and uh and then we set about developing a number of targets and on the very first drill hole on there that is now arrow there had not been a drill hole within a four and a half kilometer radius of of that target um drilling on the property had previously occurred 30 years earlier and uh we hit it with the very first hole which unprecedented and uh it's quite amazing when you consider even though the deposits are very large and high grade they are extremely difficult to find particularly in the basement rock setting you can miss them by as little as one meter that's how how precise they are but arrow very quickly showed its strength where with the very third hole we stepped out 200 meters and hit mineralization again and so we knew we're on to a significant system um but how significant uh time was time was to tell and with the 15th hole at the property we hit a very small sliver about five centimeters width of very high grade mineralization which was indicative that we were near a um very intense mineralizing system and then the 30th hole in 2014 uh at that time was ranked the fourth best in uranium exploration history uh approximately 46 meters at over 10 percent uh that hole now isn't in the top 20. it's fallen out of the top 20 holes and an arrow hosts uh all of the others um quite amazing and and so the arrow deposit has has developed into what is the world's largest uh highest grade and and given its technical characteristics have been in the confident basement rock so we're in very sound ground conditions it has a very clean metallurgy and and due to its grade it's actually a very tiny footprint it's actually going to be one of the world's tiniest underground mines at about 1300 tons per day and so it has a very elite environmental footprint not only from its technical characteristics but also the design parameters which we've put into it where we've made environmental performance one of the the top objectives with respect to our execution of development lee 2021 has been a busy year for you and your team with the highlight being the release of the feasibility study earlier this year can you just provide some overview of that study and just give us a backdrop on the net present value the internal rate of return and also the payback sure so to put in the context it's one of the most uh economically powerful min resource projects in the world across any commodity for the gold bugs out there it basically is averaging over the life of the mine about 75 grams per tonne gold equivalent economically it's an absolute powerhouse a 1.3 and this is all in canadian dollars unless i state otherwise uh 1.3 billion dollar canadian capex figure it has a payback period of 0.9 of a year so extraordinarily quick payback period and having worked on the other side of the fence financing these types of projects i've never seen one like arrow economically it has an internal rate of return at uh at a fifty dollar uranium price over the life of the mine and we'll speak about where we see prices going in in just a moment but at a base case fifty dollars a pound over the life of the mind it has a 52 after-tax irr and from a free cash flow perspective over a billion dollars a year in after tax-free cash flow now to put that into context it it'll take us into the top 15 mining companies worldwide on a free cashflow basis yet uniquely coming from a single asset which is one of the tiniest underground mines in the world with an elite environmental uh profile and that's at just fifty dollars a pound so it's an incredible opportunity in incredible jurisdiction and uh it's uh you know people throughout the terms tier one uh i think with those factors that i've just outlined uh i i deem it the one so those are very impressive economics based on fifty dollar uranium but as we both know the average contract price for uranium was in the last cycle was 75 dollars what happens to the economics then yeah that's what 75 we will elevate from the top 15 into the top 10 if not top five and uh when we saw uranium go to seven well in that average contracting price last time and we we do have it on a table there and showing the sensitivities of the project well the economic returns just go to another another level um yet the mine and the footprint stay the same and the sovereign location all stay the same and so when you when you put that into context what an incredible opportunity it is for the province of saskatchewan and also the country of canada um that we have in front of us and overlaid on top of that we're actually generating a commodity which is going to be the the base of clean air energy fuel worldwide and it's great to see the pandemic feels like we're almost through it as a as a as a planet the next issue that we really do have to face is the the clean air environment and to have not just an incredible mining project um but to have that overlaid over the top of it that's going to be positive for so many people around the globe and that's why the team at next gen so committed we certainly see the responsibility that we have in front of us to do this exceptionally well and the team is is dedicated to that objective and so economically environmentally socially it's it's such an incredible uh opportunity and privilege that that we all have that next gen in coming to work every day lee the average annual production for the first five years will be 28.8 million pounds of uranium and over the life of mine it will be 21.7 million pounds can you just put that into perspective for us how does that compare to chemical yes so that production number is based on our feasibility study which is based purely on the measured and indicated resources we have an additional 80 million pounds in the inferred category that with extra drilling will will transfer into the measured and indicated so you'll you'll see that production profile change as we're in production it'll it'll expand and go for longer um that will take us to uh based on those numbers and based on 2019 mind production which is the last full year of of production prior to the pandemic would make us around 20 of the world's uh production when we look at the production profile of the existing mines around the world um i actually think by the time we are in production in the um early part of the ladder part of this decade um you'll see that as a higher percentage than 20 at those numbers and and i i really want to be clear with this point for everyone listening is that the production profile of mined production is decreasing between now and when next gen is going in production and those those production numbers of of 28 million pounds per annum is still not going to meet the the production that is coming offline between now and then so arrow is just really going to um address some of the the production which is coming offline let alone the gap between demand and supply in the later part of this decade and look the world's going to need three to four arrows um online in the later part of this decade and uh and so yeah i know on your show you've got a number of the other companies here with with vision and and denison as well um undergoing development of of their uranium projects in the athabasca basin and we all you know we're all at different stages and offer something different but it's an incredible opportunity for a number of companies not just next gen and uh it's uh full credit to um the companies that you have on your show because they're the ones that have been in there you know since the early 2000s can continually continuously and and have really shown a lot of resilience and dedication to uh what we have you know we're on the cusp of lee that's a great overview of the feasibility study in the economics let's move on another aspect to the next gen story is the exploration upside because you and your team have only explored a very small part and you haven't done much exploration in the last couple of years because you've been focused on the feasibility study but you did announce the new exploration program in july why don't we just touch on that and tell us how many meters you're drilling how many rigs do you have going yeah that's right jimmy um we we did we haven't drilled for two years we've only recently reignished uh re-initiated that campaign with two drill rigs uh you you quite rightly point out we look we hit arrow with the very first uh hole on that target it was actually the 21st hole on the property um that we'd ever drilled it's an enormous property as well and we're just talking about the patterson corridor alone where we've only really explored 10 of the patterson corridor but we've actually got another eight corridors on the rook one property which uh we haven't even touched so we've got ninety percent of the patterson corridor but we've got another eight of nine uh corridors on the property which we haven't even touched yet which is look for everyone looking at looking at the the profile of the property it's clearly the most perspective on the planet for uranium uh mineralization and so we uh with the engineering study uh completed in february of 2021 we're on the final stages of drafting environmental impact study uh it was time to reinitiate the the exploration campaign i want to be clear here we have bold uh perspective here we are not looking just to incrementally increase arrow we're looking for new arrows with these two drill rigs and so one of the areas we're looking at is below the arrow mineralization because there's a geological basis that arrows the the top of the much broader system at depth no if we are to discover anything down there uh it's going to take time to develop because it it's below arrow and and below a thousand meters but it'll be highly economic now that we've established the arrow deposit on its own with all that infrastructure in place etc any type of mineralization that we find from here is going to be highly beneficial to the uh to the project and investors and so we're looking underneath arrow we're also looking a long strike from arrow at a couple of areas which we we have poked some holes in in the past but uh back in 2015 but that's when arrow was going you know developing at such a rate of knots we we pulled the rigs prematurely and brought them narrow to help define up the resource so there's there's a number of targets that we've been you know the the geological department's been pressuring us to get back to as soon as they can and and we'll be touching on those uh during this campaign the campaign is twelve thousand meters six thousand other under arrow uh and uh and the balance on the regional uh targets along the patterson corridor but i i think you know you can see us having at least two rigs operating continuously uh throughout 2022 um because look it uh there's so many targets um and we we would like to have a a full understanding of what we're dealing with here but look to give us some context we could have 10 rigs drilling for 10 years 24 7 365 days a year and still not complete the full geological assessment of the rook one property it's uh it's that extensive so as you said earlier you have measured and indicated reserves of 210 million another 80 million pounds in inferred and like you said you have only drilled 10 percent of the patterson lake corridor so what's the blue sky well it uh it's enormous um i think there's undoubtedly you know the history of exploration on the property how quickly we hit what is the world's you know largest highest grade uranium project it's an incredible environmental setting um yeah i i think it's enormous and uh one one point i'd also make is that look the mpv of arrow is incredible um in the way things are moving though and the the value that is getting placed on companies that are generating like uh very good environments for the for the earth yeah i think there's a bit of a shift towards weighting the value of a company towards its its esg component and and i think not only is the mpv impressive of next gen but that esg component is as well and i think you're going to see that that value over time and uh you know it's we're in the very very early days of our company's development lee that's a great overview and now i want to move on to your balance sheet and also your shareholders you're cashed up with over 200 million dollars how are you going to allocate that capital yes we have 200 million uh in cash as we speak we have ongoing the environmental impact study which were nearing completion we've got front end engineering design which uh we've currently initiated which will you know get the design level to a very fine level of detail and then we also in our feasibility study showed we there was 158 million of pre-commitment uh capital works such as an airstrip uh surface clearing we've actually even started that um over the course of the the third quarter of 2021 with very detailed geophysics technical drilling for the foundations um for the mill and and the mine and so you'll see that um continually uh executed uh over the the 2022 and uh and so we're well funded into 2024 with all of our current uh plans and and objectives and uh looking forward to uh to getting into it so in march you did a raise of 172 million dollars and a lot has happened since then but how did that raise go did you see a lot of new institutions come in and if so where were they from where the u.s or uh europeans yeah it's a very good aspect of that we look we experienced back in november of last year with boris johnson very clearly committing to nuclear energy i see this morning that he's announced that their energy will be fully renewable or nuclear by 2035. then biden became president of the united states doubled down on clean air energy with a very strong commitment to nuclear energy and and around that time we started receiving a lot of inbound calls from esg funds and and generalist funds and uh that's never happened um in in uh well my career which uh started in uranium back in 2002 and and those calls have been growing and growing over time um since november of last year because it really does feel like the appreciation for just the power of nuclear energy in terms of generating base load um electricity uh without emitting carbon emissions is uh is is really getting accepted based on the science finally which is which is the key here and so we've had a lot more calls from esg funds and also generalist funds uh since november of last year and the 172 million that we raised um in march of 2021 we had a number of new entrants into uh on the share registry also with lee kashing cef holdings uh converting their debt to equity currently have 19.9 of the of the company but we have all of their voting rights um i think over the last 12 months you've seen our share registry become less uh dominated by mining focused investors and with a higher percentage of generalist and esg focused investors uh entering in the story well you raise a very good point there because i think people are waking up to the fact that even though you talk about renewable energy and it sounds good wind and solar alone aren't going to cut it solar is only you can only generate power from solar 20 to 30 percent of the time whereas nuclear goes 24 7. yes exactly and i i think there's been no better test than a pandemic to show the value of of nuclear energy how it stood up even during a pandemic and look technologies for wind and solar need to continue to be developed etc but you've just hit the key point jimmy today and forecast for the next 10 to 20 years that technology in wind and solar needs to really develop before it can be heavily relied upon you've got to have a a mix of energy sources and in terms of base load and carbon free it's its nuclear energy or hydro if the if the landscape uh nearby a city facilitates it so you touched on this earlier but you said your next big permit is the environmental impact statement and remind me again when is that due so we are in the final stages of drafting our environmental impact study uh it's a large document but it but it's one we've been working on for over five years uh incorporating all the data dating back to 2013 and we're in the final stages of that we'll be submitting that shortly after uh it's completed at the end of this year and then we'll be undergoing the regulatory review process but it's fair to say we've been working side by side with the regulators for that last five years they've got a very good understanding of what they're about to receive and really to put that in the context the eis is formal documentation of that process that we've already gone through so uh we're looking forward it's going to be a very significant milestone for the company and uh we're looking forward to having that submitted and then there'll be a public review period and uh and and then approval thereafter so once you get all your permits what's the best case scenario in terms of timing for construction and then ultimately production well it's another good point jimmy we will be uh uh executing on our pre-commitment early works that 158 million dollars worth of spending in parallel to that permitting process we are extremely confident with the permitting process based on all of our feedback and we are doing that with confidence so the permitting process can take a period of time it won't inhibit the pre-commitment early works that i've i've discussed and so the construction time for the project is 46 months and so when will will be precisely in in production time will will tell but we're extremely confident for the the early part of of this latter part of the decade um post 2025 somewhere in the latter part of that decade but we're very confident it'll be in the earlier part of of the latter half and so we look forward to going through this process we've got enormous confidence around it uh the government's um support for the company and the project as well is is very well understood and also the local communities as well so it um it's an exciting period for for uh everyone and all stakeholders and the population of saskatchewan and canada and um yeah we are very excited about it we've seen a lot of m a i want to digress now from nextgen and and get your thoughts on mna we've seen a lot of this in the precious metals sector here in the last couple of years but we haven't seen any in uranium and given that we just came out of this low point the cycle where prices were very distressed are you surprised we haven't seen some of the majors come in and buy some of the developers or explore cos yeah look it's an interesting point and uh look i i think with uranium being so flat for 10 years and it's only recently with the the sprot uranium trust initiating or launching a mechanism that is going to lead to a greater price transparency which i think is in the interest of all uh market participants uh i think you will see that that interest increase um as over the coming period um uranium has been at historically low levels and but um you know with the supply demand and supply situation the way it is i think you're going to see larger entrance and not just from an economic point of view but also from a green energy point of view battery metals clean energy um i think you're going to see more interest from those major mining companies that not only are in uranium but also not in uranium and i think uniquely arrow goes the first first time there's been an asset like us which in uranium hasn't required any level of sophistication um it's in competent basement rock with a very clean metallurgy in an incredible um environmental setting and sovereign location and with the movement so heavily weighted towards esg reporting uh i think it's just a around the corner the other aspect which i think is interesting is look oil companies um have enormous pressure on them to improve their carbon emitting profile uranium mining it's a fuel energy fuel and it can help offset a lot of that carbon emitting aspect from from producing oil lee as we wrap up what can shareholders expect into terms of news flow here in the coming weeks and months from next gen yes we we actually have our made in the sustainability report and the final stages of drafting as well so we're that'll be based on 2020 numbers where look we had a pandemic activities that saw it were very very minimal but it's going to provide investors a real foundation as to how you know we are uh conducting ourselves and i think we have one of the best csg stories in the entire sector and and so uh that's going to be an excellent document which is to be published shortly finalization of the eis one of the most major milestones in in the company's history today that's just around the corner and we've got two drill rigs drilling consistently if we hit any type of mineralization it's going to be material and we'll be coming to the market with it and so uh yeah we've got a number of aspects on on at the company which is going to generate news flow uh consistently um from now um going into the into the future and so incredibly exciting time at the company and uh and i i should also add we're continually building the team as well um and so that's exciting as well and both uh predominantly in in saskatoon but uh we've also recently engaged some some executives that are in other parts of the world um closer to the markets the the nuclear fuel markets and so uh it's a very exciting time well lee that's a great overview of the next gen story and i want to thank you for sharing it with us today to all the viewers if you have any further questions for lee and his team send us an email to info at bloorstreetcapital.com and we'll get you an answer or if you would like some research on nextgen send us an email and we'll send it along lee once again thank you for making the time today thank you very much jimmy appreciate your support and all the investors support [Music] [Applause] [Music] hi john and thank you for joining us today thanks for having me john sprout inc has just over 17 billion dollars in assets and a large chunk of that about 12 billion dollars is allocated toward the physical trust business mostly in gold silver and platinum but you also recently started a new product the uranium trust and why don't we just start there and give us a brief overview and the history behind it and what was the catalyst for starting it sure yeah so as you mentioned um sprott's very well known for managing a suite of precious metals uh commodity funds and these are very unique in that they only hold physical metals fully allocated and segregated and stored at the royal canadian mint and you know we thought given the success we have with this suite of funds what other commodities could we put into this this type of vehicle and one of the commodities we identified that we thought was a good candidate was physical uranium and a few years ago we started to do work on on whether we could launch a new uranium trust and at that time uranium unfortunately was in a pretty pretty uh fair you know very deep long bear market and decided that trying to get a new trust off the ground from scratch was going to be a very difficult undertaking because of timing um so as an alternative we started to pursue uranium participation corp which has been around uh since 2005. so we made the acquisition for uranium participation corp it had it gave us a great starting point it had 18 million pounds of physical uranium in it and obviously a very long history and given our experience and expertise in the physical commodity side you know we had a number of different ideas on how we could make the vehicle uh more shareholder friendly more transparent more liquid and uh and more efficient at raising capital and that's exactly what we we did with the reorganization of upc into the new spr uranium trust which started uh trading on july 19th of 2021 and what is the aun when you took it over what was the aum of upc and what is it now sure so when we took over the uh the company and reorganized it there was approximately 630 million us dollars of assets there was about 18 million pounds of u308 and then you fast forward to you know end of september and uh the aum of the fund is around 1.4 billion and you might say well how did that happen in such a short period of time and it was really two-fold uh one the price of uranium has gone from kind of the low 30s up until today i would say it's trading around 43 44 a pound um but as early as last week it you know it hit 50 a pound so we've had this big lift in the price of uranium and second of all uh we've implemented something called an at the market uh capital raising mechanism which allows us to issue new shares in the trust when it's secretive uh to do so and through that mechanism we've raised a little over 400 million us dollars which we think is just fantastic in terms of the investor interest we've seen um post post the reorganization there was a lot of pent up interest in the trust and investors are expressing their interest by by buying new units in the trust so you just said that you activate the atm when it's creative to do so does that mean when it's trading above nav exactly so we have a fundamental test each day where we have to we have to ensure that any new units that are issued are at a higher price than than the prior day net asset value and speaking of the net asset value this is really a key enhancement we we implemented with the trust and that is every night we publish a net asset value and for context the predecessor vehicle upc would do a monthly net asset value and we think this change is really important because one it allows the atm to operate but more importantly it gives transparency to all investors around exactly what is the value of the underlying assets within the trust and they can gauge how the fund is trading each day in the market relative to the implicit value or implied value of the trust so this is really important for price discovery in terms of investors understanding exactly how the how the trust units are trading are they cheap or they are the expensive relative to that implied value and i do i do think it gives the marketplace a heightened level of confidence around exactly what they own and and and how to how to you know trade the how to trade the fund more effectively so in addition to the trust trading above nav what about the price of uranium does that also come into effect and also do you have to have supply somewhere like in the horizon before you initiate this atm sure that's a great question i mean uranium is a very different commodity market than when then we're used to um you know we're used to being able to track a transact in very large volumes in very short periods of time in the precious metals markets and uranium just does not move that quickly it's uh it's obviously a byproduct of buying in the utility by utilities which you know are not in any rush to do so so everything moves a little slower you're you're dealing with a lot more time zones um but it is important getting back to your question about having some line of sight on the material and where someone is is willing to let go of that material to the trust so we're constantly mindful of where's the trust trading relative to its nav and where could we put uh where we where do we think we'd have to spend uh per pound to buy more more more uranium to back the units that we would be issuing so it is it is an important consideration and remind me again did you say you have acquired 10 million pounds yeah so that when we acquired the trust originally there was about 18 million pounds of u308 and um since august 17th we've added uh about 10.3 million pounds so the fund is over 28 million pounds of u308 so just to give you some perspective uh from 2005 to the middle of 2021 it took upc that period of time to accumulate 18 million pounds and we've done about 10 million pounds in about five weeks so it just illustrates the power and the efficiency of the atm mechanism john bhp has a very large copper mine in australia called olympic dam and uranium is a byproduct and i've read that they tend to sell that uranium into the spot market so just a hypothetical if they were to come in and sell a large uh chunk of uranium and they it drove the price down in the spa market and let's just say drastically how would you handle redemptions assuming of course you you did get some redemptions because of that price move sure well right now the trust does not have a redemption feature built and built in into it uh and obviously the complexities of trying to deliver physical uranium are are very different than delivering bars of gold or silver with our other trust so right now there is no physical redemption uh mechanism or cash redemption mechanism and and that's important to understand because i think one of the things that's overhanging the uranium market is this fear that there will be this big secondary supply of material like there was after fukushima that will somehow undermine the market or basically push the price down as i said earlier the the mandate of the fund is to operate in perpetuity and it's a passive holding company that means we basically raise capital buy material and stock pilot it's not designed to trade material it's not designed to lease material or loan material to anybody it's a it's rarely a passive vehicle that's designed to operate in perpetuity and now i'm curious i want to find out a little bit more about the market itself who are the actual sellers of uranium who is it you phone on a regular basis to find the supply sure well we have a technical advisor called wmc energy and there's two individuals there that are both based out of the us u.s they're both ex-chemical employees and they've been a wonderful resource for the trust and they basically assist us with all things physical uranium so everything from procuring uranium to the contracts around those purchases to the end storage and um they've cast a very wide net in the marketplace i mean given the size of the trust and uh and the buying demand that that we may be encountering from week to week we want to make sure we have the best offers in front of us so i think we've done uh trades with 15 different counterparties so far which i think is a great sign that a lot of people are interested in doing business with the trust and so we're looking for the best offers whether it's coming from a trader or producer or utility an investment fund we've even bought a little bit of material from a junior uranium miner so we're basically scouring the world and trying to find the best pounds available with the shortest delivery windows possible and so you raise a good point there about the delivery when i buy a stock in the market it's settlement is t plus two what's the settlement day for uranium yeah that that took a little while to get my head wrapped around uh the the nuances of the uranium market so typically in uh and when you're buying physical um near-term deliveries is generally around 30 days so within 30 days there's a process to for the seller to notify the storage facility that they're going they've sold the material they need to change ownership title from from them to us that takes about 10 days but the whole process can take about 30 days just to move the ownership title within within an existing warehouse arrangement if you're talking about buying out and term that could be two three four months generally those pounds of material are are usually in transit to a facility so sometimes you have to wait two or three or four months to actually take title that material and settle up with cash so right now this product only trades in toronto but you are seeking a u.s listing what's the timeline associated with that yeah the toronto uh listing has worked out very well it's attracted to a lot of uh different investors from around the world one of the things we did with the reorganization of the trust is is to also offer in us dollars along with canadian dollars so that appeals to a broader set of investors the end goal is obviously to dual list the trust like all of our other funds on the new york stock exchange and we're starting that work right now to prep our primary listing application and one of the things i'm often asked is well how long is that going to take and my answer is simply i don't know because until you get into the actual process with the sec and start to receive comment letters you really don't know how they're going to react what are the questions they're going to focus on it will be considered a novel listing and that's simply for the fact that no one has ever taken a uranium physical uranium fund through the sec process from start to finish so we're going to be the test case and whenever you're in the test case there's always a bit of a wild card element to the process and john you mentioned earlier that the aum is currently around 1.4 billion do you expect that to grow significantly when you do get that u.s listing i think it'll i think it'll clearly help i think it will open the fund to a greater audience but i would say that the tsx listing and what it's done and the atm in canada has been very very effective in terms of attracting new investors so we're really happy with the tsx i know we always think of it as the you know in the shadow of new york but i think it's doing a really great job and what about the atm will that change in any way when you get the us listing we run atms on our our dual listed funds on both sides of the border and thankfully about a year ago the um the regulator here uh relaxed the rules around atms to make them much more competitive with their u.s counterparts so we don't see any structural differences between running an atm on the tsx and one and one running one on on the new york exchange john spot uranium started the year at 30 dollars has gotten high as 50 bucks so now it's somewhere around 45 give or take do you think the utilities are paying attention to what's happening in the spot or do they only care about the term market um i think the utilities are definitely watching very closely and the reason i'm saying that is because they're calling us some of them um and i would say it's not they're not calling because they're alarmed they're calling to basically get facts they want to better understand how the trust works how does the atm work how does the capital raising work because i think they're all trying to understand how the landscape is moving and you know one of the things about uranium as i said it was in a horrible multi-year bear market where the price was either falling or going sideways for many years and the reality was there was no urgency for a lot of utilities to to reload contracts the price was kind of going sideways or you know they were already locked in a previous supply agreement so um i think they're paying attention the spot market is obviously not the term market where they where they play but as we know when you look at the at the yield curve um short-term short-term curve does affect the long-term end of the curve as well so they are they are watching they are trying to figure out how that may impact and and and how they may have to adjust some of their their their strategies going forward so i was speaking with somebody earlier today and they told me that they they're hearing there's four different rfps out there from utilities are you hearing the same sort of thing um i've heard there's a couple of bellwether ones out there right now one in the u.s and one in asia that is going to be the first test in the first signal around where do those contracts get completed what kind of prices and everyone is is waiting to see those i think it'll be an important event but i don't think it's people should read too much into it because this contracting cycle moves slowly and it has a lot of runway to go we think the next couple of years is really what is going to drive the longer term price as as utilities enter a new contracting cycle so one of the things that can kill a bull market is is supply and we saw that back in 2007 when uranium got up to 137 bucks we saw a lot of supply come into the market and then of course it just killed demand at what price do you think we're going to start seeing more supply at what price do you think these producers who are currently offline start producing again yeah i don't i don't know what that price is but i think um if you listen to kamiko and kazam prom um you know they've been incredibly disciplined in the last few years um and you know you know they were forced to obviously the market imposed a very difficult situation on them where they had to had to close down and cut back production and i think you know they're watching they're watching what's happening obviously in the spot market that these contracts in the term market are going to give them some signals but um i think they need to see this uranium price really kind of firm and stay firm for a period of time before they're really going to change tact and and and start to increase production out in time you know i just don't think they're going to have a knee-jerk reaction the cost and time to bring these minds back uh in into production is not short um so if you're going to make a decision you you better be very confident about it otherwise you're gonna have another false start well that's a great overview of the uranium market john i want to ask you one more question before i let you go uranium's up 40 plus percent on the year gold's down 10 percent silver silver's down 20 percent is gold ever going to catch a bid again uh yes we we definitely think goal is going to catch a bit again i think uh we're very frustrated by the price of gold and silver i think right now gold is in a kind of a dormant state it's not dead but it's dormant and i think a function the function of that is really everybody is in kind of a risk-on mode right now you know in 2020 gold was a star uh it really did its job in terms of providing portfolio insurance and and helped to mitigate against a lot of risks um in the market when cobit uh exploded and um you know fast forward to the last you know if you go back the last 12 months um people's attitudes about the recovery and uh evaluation of financial assets has changed dramatically and so in a in this very cheap money accommodative uh monetary and fiscal policy environment uh investors are being incented in santa to take risk and and gold is not a risk asset it's a risk off asset as we know silver i think is more is more uh perplexing to us in terms of the fact that it is a hybrid metal it is a monetary and an industrial metal and and we're we're totally blown away that is not much stronger than it is right now well thank you for those insights on both uranium and also gold john and to all of our viewers if any of you have any further questions for john or this frock team please send us an email to info at bloorstreetcapital.com and we'll get you an answer once again john thank you thank you for having me appreciate it [Music] [Applause] [Music] hi oscar and thank you for joining us today hi james thank you for inviting that's a pleasure to be here thank you ask i want to provide you with the framework on where i want to take this discussion and i really want to touch on four elements the first one being cassata prom and just an overview of the company and then i want to touch on the spot market followed by the term market and then i want to enter a conversation with the discussion on the supply and demand and where the long-term price of uranium is going so why don't we just start with an overview of the company even though kazatta prom is the world's largest uranium producer producing approximately 23 percent of world production a lot of people aren't familiar with the company so why don't we just start with a brief overview well sounds good you know um custom rom is the national operator for atomic products in kazakhstan it was founded in 1997 and at that time um not custom rom but even kazakhstan was not kind of a very big player in the uranium space producing less than 1 000 tons just 20 years ago and now um essentially we're being a largest producer in the world with over 20 slightly more than 24 and 6 000 tons produced in 2016 which was our record so a lot of growth that um i mentioned happened during this so-called uranium renaissance time and that was also the time for most of the markets picking up so there was a big interest for the global commodity markets uranium was a part of that movement so um uh what custom promo was producing that time uh has been soaked up by the market and kind of the timing for increasing production was very very good at that time so um um we should mention that custom prom or kazakhstan ended by producing uh about forty percent of the global primary production and constant problems share is twenty three percent just attributable share so kazakhstan and kazaran prom have um actually come a long way and kazadam prom is now the largest um uranium producer since 2012. um the reason why we're the biggest iranian producers is our unique minds and reserves that we have all of them are isr method so we should mention that we are sitting on 300 000 tons of attributable reserves uh and keeping in mind that uh we can produce 13 000 tons per year that's decades of uh production and even if we look more widely we also have uh resources which is closer than 500 000 tons and converting resources into reserves is very straightforward uh all the deposits are large they are homogeneous uh and kind of their unique feature as i mentioned is the isr method so all icer method applies to all of these reserves and resources so uh we don't use any open beat any underground mining kind of what we do is very similar to oil production we have the wells where we just pump the low ph uh sulfur gas solution it goes underground for an average of 600 meters and travels uh through a sandstone hosted with uranium deposit uh and stays there over for the period for three to four months and then we just pump it out so kind of that's the uh ecologically very friendly method uh with a closed cycle so the uh liquid that we are pumping out and removing uranium then actually this liquid uh goes back to the well field so that's a very close cycle we don't generate any wastes and at your peak you said you produced 24 000 tons of uranium yes indeed how would that compare to the second largest producer in the world well um i think at that time the second largest producers producer were comical they had two minds uh in inca share that they had so they were almost twice less than ourselves right so you're just not if i was to use an oil analogy because that a prom is just not saudi arabia it's really the opec of the uranium market yeah sort of and as chief commercial officer what exactly does your job entail um well yeah so the chief commercial officer in our company um the role of the chief commercial officer in in kazaran prom is making the strategy in terms of marketing and sales but also in that position i oversee the um kind of old activities around logistics around deliveries around the contract execution and also um i oversee the activity of our trading company in switzerland as car casata prom went public in 2018 and shortly thereafter the board of directors and the management team adopted a value strategy which is essentially becoming more prudent in terms of your production and also in your marketing but can you just touch on that and expand and tell us what policies you implemented yeah thank you very very good question we um indeed we adopted a new strategy in 2018 and it is valid through 2028. so the main parts of the strategy is that we are focusing on uranium mining as our core business we are optimizing production and sales volumes based on the market conditions which was not the case before uh kind of the ipo era so um also we are creating a value by enhancing as you said marketing and sales capabilities we're implementing the best practices um uh from all over the world and if we're developing our corporate culture that sustainable industry leaders should have we implied this [Music] strategy of responsible producer and we decided to produce as much as the market needs actually so we are not following what we are producing and trying to sell it but now we are kind of setting the targets based on the market conditions and then we set up our production guidances so you have seen our um our publications that we've made in 2018 when we kind of decreased our production to minus 20 from our subsoil uh contracts level we didn't see much improvement so we extended that strategy for 2021 22 and just recently we announced that we will be following the same strategy in 2023 so um for us to consider returning back to 100 levels or even going over that uh volume should be kind of we should see certain market signals to do so so you've become a lot more disciplined in your approach absolutely we become much more disciplined we we were not producing um as we used to produce i mean in 2016 the volume was 24 and a half slightly more then we we kind of stayed much lower of that volume even though some of the um sub-soil use contracts even had an increase over the period so we've never gone to that high production volumes but kind of hopefully we will be sometimes there and if market will need that bombs that that are still in the ground as curry that's a great overview of quezada prom and now i i want to get your views on the spa market and the recent price volatility the spot price has moved significantly here in the last few weeks it's gone from 30 to as high as 50 dollars a pound how do you think utilities are reacting to this price movement if at all do they pay attention to the spot market absolutely i mean they are um they are closely watching what's happening on the market we just recently had a fuel cycle members forum of wna just a couple of days ago and we had a final discussion there and on that panel discussion one of we we had the news as one of the utilities they they said that well you know we are watching closely we are not doing quick steps um they are they are analyzing but i mean everyone who participated agreed that we will not be seeing the market as it was last year i mean um active participation of financial players like spot like sprott and like uh yellow cake i mean changed market significantly um even though we might see some correction of price in the future but it will most probably not return to to the levels that we had seen um in this summer additionally to this i would say it's not only um it's not only the active position of uh yellow cake and sprout but generally i mean the industry is moving towards nuclear bigger exposure to nuclear we are seeing those initiatives being included into the green policy parts decarbonization is also a big part we are waiting for europe to accept uh nuclear as a clean energy source um to help to reach their targets that they've committed under the paris agreement so all these expectations all these movements um [Music] played a combined role together with big interest from financial players which we haven't seen before as well so these are all good mix and combination of uh of the things that happened on the spot market and have led to that price discovery that we had seen so even though the spot market can be very active it's estimated that only 25 percent of the trades on the spot market are real in the sense that they're going to real buyers the utilities and the rest is just pounds being exchanged between traders do you think these new market participants like sprott and also yellow cake will make the spot market more efficient absolutely i mean we are already seeing how they are impacting the spot market i mean they are taking the material from the near-term and mid-term market and just putting to their account at the conversion facilities so those pounds currently are not returned back to the market and not being resold to other market participants so i mean the uh the carry traders are having tough times at the moment because there is less and less material available on the market and with what is available is being have um taken by uh financials or producers as we we could see i mean we were on the market comico constantly on the market we had seen even junior producers coming to the markets and buying um the available volumes to hold them which is i mean very good but to your previous question i would also add i mean we had seen the utilities returning back to the market earlier this year uh usually they have a good holiday period by september and usually we'll we see them more active after wna event which happens in uh first week of september but this year we've seen them returning to the market slightly earlier they were active from mid of august we had seen several rfps some of the utilities were very lucky to catch the bombs before sprott came to the market others are evaluating what offers they have on on their hands and i mean now the rfps and tenders are not just a near term and midterm period but they're covering bigger periods starting from 2024 5 and onwards and going up to 2030 which was not the case before and the number of those requests and rfps are much much higher than we had seen even in the past decade so you raised some very good points here and i just want to touch on a few of them so the rfps that are present in the market right now they're they're longer term and so if i understand you correctly in the last few years they've been short term in nature three to five years but now they're looking five to ten years out indeed so utilities for the last decade i would say they were um they were in the market which was over supplied and in the end of the year they were always coming to the market and they could always find any pounds they needed so there was an excess of material and they could even declare the pricing that they wanted to see in order to get those pounds so and it was oversupplied market which has started its movement when producers announced the production discipline some of the mines had to go offline because of the financial conditions and they couldn't sustain the production at that market price levels that we have seen in the end of 2016. so uh with the market starting to move into the responsible production part uh we had seen a lot of the material being removed and stayed in the ground for the future period so now market is for the second consecutive year will be in the deficit because of the covet impact mostly but still i mean the years which were expected to be more balanced years will be deficit years and those funds uh would not be kind of cold catched up by comical or by ourselves in the future so they are kind of lost bounds and they will not be returning to the market and i mean more we look for the forecasts of our industry experts we're seeing that the structural deficit will start arising in after 2026 and then it will be just increasing and by 2030 we would be seeing a very big deficit which um which would be even greater than another kazakhstan problem so many small producers sell uranium into the spot market you touched on that earlier does quezada prom sell into the spot market um good question chase um just recently we've made an announcement that we completed our sales plan for 2021 and we will not be selling anything to the spot market um but even before we were very disciplined in in terms of spot sales after we um adopted our strategy we were more focused to work only with utilities so we have some uh some contracts and activity when we are working with financial institutes but usually we do so if we see that our strategy matches with them and kind of our long-term view matches with their long-term strategy so but generally we are more focused on utilities our priorities with them and that's why we are not selling our bonds at the spot market we have our trading company thk they are very active on the spot market but the volume they trade there is very insignificant very small so they are acting as a normal trader they are getting um market intelligence they are exchanging volumes so kind of sustaining the liquidity of the spot market so once again you touched on this a couple of times but once again it's all about being disciplined and you want to sell your product to real buyers utilities who have a real use for it and not to short-term traders who just want to flip it for a quick profit and in the process distort the market absolutely i mean that's our strategy we're not doing business at the moment with traders we're not reselling to intermediaries so we are just focusing on um long-term market with our utilities so that's a good overview of the spot market and you touched a little bit on the term market but i want to just expand on on the the term market and can you just speak to the contracts that are out there and and i want to get a better sense of how that market works or with the utilities because a lot of these contracts that were set five or ten years ago there's going to start rolling off in 2023 so you as the world's largest producer how do you react to that or how do you change your production plan so the long-term contracting uh actually started when there was this uranium renaissance when there was a big shortage of supply on the market um so in 2008 10 still fukushima has happened actually there was a long-term contracting and the contract period was 10 to 15 years so that was kind of normal for the market at that time but when fukushima happened actually markets started to revert and we had seen less and less long-term contracting and instead we had seen more spot contracting and near-term contracting so as now the market is going to revert back again more expecting utilities to start um discussions over securities of supply because i mean they cannot afford themselves to um to be in a position when they don't have a uranium which is the main product for their reactors that they have to run so that shift is happening now we're seeing the requests and tenders being issued for a much longer time periods than it was before before they were coming and requesting a certain volume in a certain year or just a very small volumes like three hundred thousand two hundred thousand pounds per year for a three year period now the periods are becoming longer and quantities are becoming bigger so that's what we're seeing i mean all of this is being pushed by uh overall demand i mean with ins and outs in um nuclear power plants all over the world i mean the general trend is increasing uh by one and a half percent and as wna predicts i mean in 2040 we will have twice more uh electricity generated by nuclear than it is in 2020. and when you say the contracts or the pounds that are demanded are growing or becoming bigger uh how how much bigger like are they asking for is it going from 100 000 pounds to a million pounds or how much are they looking for or asking for well yeah i mean depends on the utility [Music] which is coming but i mean even the small utilities they've increased their volumes almost twice and just uh i'll try to give an example which is which is uh public i would say um china just recently announced their five-year plan um for building nuclear power plants and of uh electricity that they will be generating from nuclear so the plan is very ambitious um they are going to generate 70 gigawatts from nuclear from 40 that they're generating now so they will be building much more nuclear power plants and just after they've made that announcement uh in june um cnnc has had has announced that they will be building a big uh warehouse on the uh border of kazakhstan and china which has to um which has to store 23 000 tons by 2026 so that's an estimate and i mean that's a very significant quantity that most probably will be used as a strategic inventory that china would be using to make sure that they will have necessary bonds to support their nuclear program so that's one of the examples that we can kind of share and i mean that's not only china who is being worried about future security of supply so other utilities are also there but they would like to see that the current kind of price movement and price increase it's not a temporary move but it should be some something that will be for uh long term and once again i just want to reinforce that all these changes that are coming and especially with the long-term contracting and the way it works within this industry this is one of the reasons why we've curtailed production because you know these contracts are coming up for renewal and these utilities are going to begin looking for a lot of pounds and so you want to make sure you're ready for that and at the same time you want to make sure you get a a good price you'd rather sell uranium at 43 or 53 dollars a pound as opposed to 33. well absolutely i mean we would like to to have the value for the pounds that we're selling and if we are to increase our production and if we are to to start any new greenfield mines that we have i mean we should we should convince our board to spend those um to spend those money into the investing and we should see some incentive price which we're not indicating as we are the lowest cost producer but i mean such um such uh decision that we would be making in terms of increasing our production should be supported by the long-term contracting that we have that we have to see from from the utilities so without this long-term contracting i mean it would be hard to convince our board or to make decision to have to increase the production and you brought up china and their demands and i also want to just touch on france given that 70 of their electricity comes from nuclear reactors and it's estimated that they use 25 million pounds of uranium annually so given their demands they just can't phone you up today and say hey i need some uranium next year they have to think five or ten years out to make sure they have the supply absolutely i mean edf remains our strategic partner our strategy customer we have ongoing contracts with them unfortunately i cannot disclose the volume of the contracts and the period of the contract but i mean you are completely right and edf is is is the company that has a good strategy in terms of making sure that they have um security of supply so that's a great discussion on the term market and also the spot market as car now i want to move on and tie it all together and i want to look at the supply and demand side and the fundamentals and try to get an idea of where the long-term price is going and you mentioned this before we have this whole green economy and decarbonization and according to the world nuclear association there's 443 reactors that are active in the world right now there's 57 that are currently being built there's over 100 that are planned on being built so there's a lot of demand coming from the reactors and then with the whole green economy and the push toward net zero emissions the demand side looks very robust but then when you look at the supply side as you mentioned the supply you and other producers have really cut back and it's estimated that between 2021 and 2030 there's going to be uncovered demand for 700 million pounds so having said all that do you think it's different this time as you mentioned the demand side is very robust it's increasing we will have more and more reactors being built um especially in asian countries in china in india um we hope that they will be followed by eastern europe maybe some part on the middle east as we have seen in newcomers to our industry like united arab emirates so um we should also expect maybe smrs to come to the market as well that that will be an additional even uh more bigger demand i mean smrs have a big big and great potential to kind of to reshape the whole industry but yeah you're right at the moment we don't have any uh replacement for uranium as a fuel and it has to be produced in order to make sure that all this um industry will have enough material and as i uh mentioned in the beginning of of this interview we have a great uh resources and reserves and again we would like to make sure that uh we have we have a um incentivized value to invest into these deposits that we have and i mean these discussions i think are starting now they are not very quickly starting but we're seeing utilities starting to discuss some uh longer term volumes [Music] as we were indicating we are not um we are not setting a certain price like other utilities or like other producers are doing for us much more important is having a contract portfolio that will be letting us to increase our production um in terms of price um that should incentivize producers to bring new mines i think we should refer to the idle capacities that we have on the market now and the kind of the most obvious one is macarthur river by chemical that has to come online next because that's the top plus mine with all the capex is in they just have to restart it back the price should be followed by the contracts so if we would be seeing that um intention from utilities to start discussing with the big sustainable primary producers um to bring uh idle capacities uh for coming for its macarthur for ourselves it's returning back to 100 or even going more for 120 percent um but in terms of greenfield projects i mean there should be something more more than kamiko's restart for macarthur price to incentivize and um as as we discussed i mean the volume is too big to be covered only by kazar and from that should be kind of several primary sustainable producers that should be incentivized by the industry to to bring those pounds to cover this huge gap that we're foreseeing so once again it's estimated that between 2021 and 2030 there's uncovered demand for 700 million pounds which is a lot and you also mentioned earlier that you the market essentially needs another kazada prom and is there another kazatta problem out there somewhere well you know it's hard to discuss the mines outside of kazakhstan for ourselves i mean we are not very sure if they are sustainable minds i mean we know that they have a big resource but we are not sure about their capexes their estimated production costs might be very attractive but i mean only he time will show if that's the case or not so for any future production outside kazakhstan i wouldn't comment on that but in terms of kazakhstan we have enough production to to to make sure that the that we will do um everything we can to to support the industry but as we said there should be some other primary producers incentivized to bring their minds as well it cannot be just hazard and problem of trying to bring the pounds to the market so you tell a very bullish story for uh uranium price and where the long-term price is going so i want to put you on the spot now askar and ask you where you think the price of uranium will be in five years well you know that's a very very interesting question i mean if you would ask me one month ago whether the price would be 50 um i don't think i would say that it will be 50 just one month ago but we're now at 50 with with with all this kind of um activity on the market and kind of sprouts doing a tremendous job i mean they've actually shown to the whole market what's the real depth of the market and that the spot market should never be considered as a reliable source of a long-term supply so with a kind of price being formed at the spot activity which you also mentioned is only 30 percent going to the real utilities and other material is going back and forth i mean it's very hard to predict where it would be because that price is not a fundamental price uh or let's say it's not the price set by kind of fundamental moves so we might more look to this long-term price but where it will be i think it it has to be somewhere where the new incentivizing price for the mines should be as current typically when i wrap up my conversations i always ask the company what investors can expect in terms of news flow in the coming weeks and months but given the size of your company and also your long-term outlook i'm going to have to ask you what investors can expect in the coming years from quezada prom well i think investors should expect that we'll still keep our strategy we will still be valuing all the market conditions before making any decision about production but at the same time we don't want to have shocks on the market we don't want to repeat the story that we had seen in 2007 and eight when we had this huge increase of the price with a weak fall so we would like to have the market be in a sustainable condition without huge peaks and shocks so we are as we indicated uh at pre-ipo we have some [Music] we have some deposits that we are developing so we are kind of starting to prepare some of the assets that we might need in the future um because some of our mines are also running out and we will have um several mines that will go offline by the end of this decade so we need to replace them and we need to make sure that whenever market gives us certain signals and we understand that utilities need more bounds we should be on time so we are doing some some of the exploration on on the deposits that we had indicated in our ipo [Music] ipo documents so generally i mean as i said we will be keeping our market discipline we will keep our market centric strategy and we will be focusing um on the long-term market with utilities that's that's what the investors should know as car that's a great overview of casata prom and also i enjoyed hearing your reviews on the spot market and the long-term market and also the supply and demand dynamics and i want to thank you for making the time today and you've been very gracious thank you thank you james well that brings us to the end of our uranium conference and i hope you found it informative if you have any further questions for any of the presenters or if you would like some research on any of the presenting companies send us an email to info at bloorstreetcapital.com and we'll send it along once again don't forget to subscribe to our channel bloor street 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Channel: Bloor Street Capital

Views: 3,471

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Id: 63Hd9jyndkI

Length: 181min 59sec (10919 seconds)

Published: Wed Oct 06 2021

Reddit Comments

[u/anotherlostmonkey]

So...does that mean a 5+ year bullrun? My entire portfolio hopes so.